After a 2 1/2-year review, the Pension Benefit Guaranty Corp. has agreed to assume administration of the underfunded pension plan for the United Way for Southeastern Michigan and numerous other non-profit employers.
The move ensures the plan's 1,572 vested participants will all receive the maximum benefits under federal law.
But it doesn't erase liabilities for the 18 non-profit employers that remained in the plan until its termination in March 2010 — or for those employers that were in the plan for the five years prior to that termination, the PBGC said.
There were at least 31 agencies in the plan during those five years, according to reports from Crain's Detroit Business, a sister publication of Pensions & Investments. The PBGC is covering the plan's shortfall of nearly $24 million. But it will seek to recover that amount, collectively, from the employers that contributed to the plan within five years of its termination.
The agency also plans to seek termination premiums of $1,250 per participant from the employers, adding up to about $2 million for three years, which will help cover its costs to administer the plan.
But the employers won't have to make up what others don't or can't pay, the PBGC said, adding that it often settles with employers based on their ability to pay.