Tomkins Corp., London, agreed to contribute an additional $8.7 million to its 10 defined benefit plans of U.S. affiliates and forgo $35 million in pension funding relief that the company could have otherwise received under recent U.S. pension relief legislation, confirmed Marc Hopkins, an agency spokesman.
The 10 pension plans are underfunded by a total of more than $200 million, according to a PBGC news release. Total assets for the plans are not public, Mr. Hopkins said.
The deals stem from discussions between Tomkins and the Pension Benefit Guaranty Corp. over the Sept. 30 leveraged buyout of Tomkins by the C$129.7 billion (US$125.8 billion) Canada Pension Plan Investment Board, Toronto, and Onex Corp.
Tomkins closed a facility for affiliate Selkirk Corp. in Winters, Texas, on Jan. 7, the news release said. Under the ERISA, the PBGC must seek additional protection from the plan sponsor when more than 20% of a company’s employees covered by a pension plan lose their jobs as a result of a plant closure, the news release said.
“PBGC protects pensions, and the right way to do that is not just to wait until plans fail,” PBGC Director Joshua Gotbaum said in the news release. “Our agreements with Tomkins are a good example of how PBGC works to strengthen and keep plans going.”
John Barker, director of the Tomkins retirement department, had not returned telephone calls by press time seeking comment.