The Pension Benefit Guaranty Corp. is assuming responsibility for the pension benefits of about 1,500 current and former employees of Hostess Brands Inc., Irving, Texas, confirmed Gary Pastorius, a spokesman for the Washington agency.
The workers and retirees had earned benefits under the American Bakers Association Retirement Plan, Washington, a multiple-employer plan to which Hostess' predecessor, Interstate Bakeries Corp., contributed until 2008, according to a news release from the PBGC.
At the request of ABA plan trustees, the PBGC on Oct. 13 divided the ABA plan's assets and liabilities between IBC employees and participants employed by the ABA plan's other contributing employers, according to the release.
The IBC portion of the ABA plan was terminated on Oct. 20 and the PBGC will become responsible for all of the IBC's $82.5 million in unfunded liabilities, the PBGC news release said. The IBC portion of the ABA plan has no assets, according to the PBGC news release.
“At the time IBC was in Chapter 11 bankruptcy in 2005, the part of the ABA plan for IBC workers had a negative asset balance,” Mr. Pastorius said in an interview. “The ABA plan had been paying IBC retirees from its other assets, and IBC, while it was in bankruptcy proceedings, withdrew from the ABA plan.”
The PBGC also took over the pension plan of Denman Tire LLC, a Leavittsburg, Ohio-based tire manufacturer, according to agency spokesman Marc Hopkins.
The PBGC stepped in because Denman Tire, which covers more than 600 former workers and retirees, is liquidating in Chapter 7 bankruptcy proceedings and there will be no sponsor to fund or administer the plan.
The Denman Tire Corp. Pension Plan is 46% funded, with assets of $15.1 million and liabilities of $32.7 million, according to the release. The PBGC expects to be responsible for $17 million of the $17.6 million shortfall. The plan was terminated on March 17, and the agency took over the plan Sept. 21.
Mr. Hopkins separately confirmed that the PBGC will assume responsibility for the plan of Chardon, Ohio-based Chardon Rubber Co.
Chardon Rubber sold most of its assets in Chapter 11 bankruptcy protection, and there was no sponsor left to fund or administer the plan.
The Chardon Rubber Co. Retirement Plan, which covers more than 840 former workers and retirees, is 57% funded, with assets of $16.8 million to cover $29.5 million in liabilities, the news release said. PBGC expects to be responsible for $12.4 million of the $12.7 million shortfall.
The plan, terminated on Dec. 31, 2009, was taken over by the PBGC on Sept. 23.
And the PBGC has taken over the defined benefit pension plan of automotive parts supplier FormTech Industries LLC, Royal Oak, Mich., Mr. Hopkins confirmed.
FormTech also is liquidating in Chapter 11 bankruptcy proceedings. The FormTech Industries LLC Pension Plan, which covers 570 workers and retirees, is 38% funded, with assets of $2.23 million and liabilities of $5.86 million. PBGC expects to be responsible for $2.05 million of the $3.63 million shortfall, the news release said. The plan was terminated on Dec. 31, 2009.