Cooper Tire & Rubber Co. will inject $39 million into its pension plan in an agreement with the Pension Benefit Guaranty Corp. the agency announced Wednesday.
The Findlay, Ohio-based manufacturing firm will close a 1,300-employee plant in Albany, Ga., later this year. Under federal pension law, when plant closings result in job losses for more than 20% of covered workers, the company must make additional contributions to its pension plan.
Under the agreement with the PBGC, Cooper Tire will fulfill its $62 million obligation by contributing $39 million to the pension plan and waiving its $23 million credit for past overfunding.
The PBGC said it encourages companies to contact the PBGC before deciding to close plants to try to ensure similar agreements.
“The PBGC keeps a constant watch for corporate actions that can put pensions and the pension insurance program at greater risk,” PBGC Acting Director Vince Snowbarger said in a statement. “But in this instance, when Cooper Tire planned to close their Albany facility, they approached us to negotiate suitable pension funding protections like those announced today.”
Zack Phillips is a reporter with Business Insurance, a sister publication of Pensions & Investments.