The PBGC will take over the defined benefit pension plan of New United Motor Manufacturing Inc., Fremont, Calif., confirmed PBGC spokesman Gary Pastorius.
NUMMI is a vehicle assembler jointly owned by Toyota Motor Corp and Motors Liquidation Corp., the liquidating entity that remained after General Motors Co. emerged from Chapter 11 bankruptcy protection. It plans to end production at its Fremont assembly plant on March 31.
The Pension Benefit Guaranty Corp. has determined that the plan will be abandoned as a result of the plant closure, leaving the company unable to pay benefits, according to a news release.
The New United Motor Manufacturing Inc./UAW Hourly Defined Benefit Pension Plan is 55% funded, with $161 million in assets and $292 million in liabilities, according to PBGC estimates. The PBGC expects to cover $126 million of the $131 million shortfall.
Jerry Geisel, editor-at-large at Business Insurance, a sister publication of Pensions & Investments, contributed to this story.