The Pension Benefit Guaranty Corp. is expected to take over two Schwinn Bicycle Co. pension plans, which are underfunded by $9 million.
The Chicago-based bicycle manufacturer has $7.4 million in assets and $16.3 million in liabilities. The PBGC said the pension benefits of about 1,000 workers (including 365 retirees) will continue without interruption.
Zell Chilmark Fund L.P. of Chicago purchased the assets of the ailing Schwinn Bicycle Co. in February 1993, after Schwinn filed for bankruptcy in 1992. Zell is producing bicycles under the Schwinn name but is not responsible for Schwinn's hourly and salary pension plans because Zell purchased Schwinn's assets and not its stock, a PBGC spokeswoman said.
In addition, Heintz Corp., Philadelphia has not said whether it would allow the PBGC to take over its pension plan, which is underfunded by $21 million. The aeronautical parts manufacturer has pension assets of $21 million and a liability of more than $42 million.
The plan has 1,153 participants, including 722 retirees.