The Pension Benefit Guaranty Corp. reached an agreement with Anchor Glass Container Corp., Tampa, that will keep the company's three pension plans alive.
As a result, the agency will drop its court action, filed in January, that sought to terminate the three plans that have $325 million in assets and nearly $515 million in liabilities, and cover 15,600 workers and retirees.
According to the agreement, Anchor Glass, which is mostly being purchased by Consumers Packaging Co., Toronto, will pay $18 million in missed contributions at the close of the sale. It also will pay required pension contributions, which last year totaled $30 million.
In addition, Owens-Brockway, a subsidiary of Owens-Illinois Corp., Toledo, will acquire a small portion of the old Anchor, and will be responsible for about $15 million of the unfunded liability.
Vitro, Sociedad Anonima of Mexico - the old Anchor Glass' parent - will guarantee payments of up to $70 million over the next 10 years should Anchor fail to pay its obligations. The amount and the term of the payments will be reduced accordingly if the termination happens after Jan. 31, 2002.
"PBGC was able to forge agreements that continue the pension plans and better protect the workers' pensions, without the need for PBGC to take over the plans," said PBGC Executive Director Martin Slate.
The PBGC hasn't had as large a case since 1993, when the agency terminated Sharon Steel's five plans, which were underfunded by $250 million.