(updated with correction)
PBGC is assuming responsibility for the pension benefits of about 1,500 current and former employees of Hostess Brands Inc., Irving, Texas, confirmed Gary Pastorius, an agency spokesman.
The workers and retirees had earned benefits under the American Bakers Association Retirement Plan, Washington, a multiple-employer plan to which Hostess' predecessor, Interstate Bakeries Corp., contributed until 2008, according to a news release from the Pension Benefit Guaranty Corp.
At the request of ABA plan trustees, the PBGC on Oct. 13 divided the ABA plan's assets and liabilities between IBC employees and participants employed by the ABA plan's other contributing employers, the news release said.
The IBC portion of the ABA plan will be terminated on Wednesday and the PBGC will become responsible for all of the IBC's $82.5 million in unfunded liabilities, the PBGC news release said.
The IBC portion of the ABA plan has no assets, according to the PBGC news release.
“At the time IBC was in Chapter 11 bankruptcy in 2005, the part of the ABA plan for IBC workers had a negative asset balance,” Mr. Pastorius said in an interview. “The ABA plan had been paying IBC retirees from its other assets, and IBC, while it was in bankruptcy proceedings, withdrew from the ABA plan.”