WASHINGTON -- The Pension Benefit Guaranty Corp. has taken steps to deal with the underfunded pension plans at Sunbeam Corp., Inland Steel Corp., Van Camp Seafood Inc. and Petrie Retail Inc.
With Sunbeam, Delray Beach, Fla., the PBGC and the company reached a settlement to strengthen the financial security of the troubled consumer appliance manufacturer's three underfunded pension plans, which have assets of $48 million and liabilities of $80 million.
Sunbeam, which has shut down several plans and laid off half of its work force -- or 6,000 employees -- has provided the PBGC with letters of credit valued at $20 million.
The letters of credit will kick in if the company decides to shut down any of its pension plans. The agreement is effective until early 2002.
The agency also reached an agreement with Ispat International NV and Inland Steel Industries Inc. over the unfunded pension plan of Inland Steel Co., the Inland subsidiary that Ispat is acquiring.
Under the terms of the agreement, Ispat and Inland will contribute a combined $25 million in cash into the plan immediately and another $20 million at a later date. They also will provide financial guarantees.
Inland Steel's pension plan has assets of $1.9 billion and liabilities of $2.5 billion.
In Van Camp's case, PBGC took over three underfunded plans. Had it not intervened, the pension plans would have been disrupted as a result of the company's liquidation.
Two of the plans were shut down Nov. 1, 1993, when the company's Puerto Rico subsidiary filed for bankruptcy; the third was shut down Aug. 6, when the company closed its San Diego facility. The plans have combined assets of about $13 million and liabilities of nearly $21 million.
The agency also has taken over retailer Petrie's plan, which has assets of about $46 million and liabilities of $60 million.
Earlier, a New York federal district court had agreed to let the company shut down its plan as part of its reorganization efforts.
Meanwhile, the PBGC hiked to $5,000 the amount of benefits it will pay all at once to participants with small benefit accruals in pension plans the agency takes over.
The agency's change in rules was required under changes in law enacted last year. Until now, the PBGC paid out only up to $3,500 in lump sums to participants in plans taken over by the PBGC.
