PBGC WILL PROTECT SHARON STEEL PENSION PLANS
WASHINGTON, Oct. 21 /PRNewswire/ -- The Pension Benefit Guaranty Corporation (PBGC) today acted to protect the pensions of 6,200 workers and retirees participating in five underfunded defined benefit plans of Sharon Steel Corp. PBGC notified the company that it has approved its applications to terminate the pension plans as of Oct. 17, 1993. "Sharon's workers and retirees can be assured that they will continue to receive their benefits uninterrupted," said PBGC Executive Director Martin Slate. Of the participants covered by the plans, approximately 5,000 are retired and presently receiving benefits. In addition, some 1,200 employees in Sharon's work force are entitled to receive benefits upon reaching retirement eligibility. Most retirees will receive the same benefits they are now getting. PBGC will pay benefits according to the plans' provisions, as of the date of the plans' termination. Participants will receive the benefits they had earned through that date, subject to the legal limits. The pension plans have total assets of about $100 million and pension liabilities of more than $350 million. PBGC's guarantee of benefits will cover approximately $206 million of the $250 million shortfall. PBGC anticipated most of this loss and it is included in the agency's existing $2.7 billion deficit for the single-employer insurance program. "This case highlights the importance of the PBGC guarantees and the need for legislative reform," said Slate. The administration reforms, recently announced by Secretary of Labor Robert Reich, would make changes to improve pension funding and protect retirement security. The company declared its Farrell, Brainard and Coil Coating facilities permanently shut down as of July 19, and on Aug. 18 filed notices of its intention to terminate the plans with PBGC. Last month, Judge Warren Bentz of the U.S. Bankruptcy Court of the Western District of Pennsylvania ruled that Sharon Steel could not emerge from bankruptcy without terminating its pension plans. PBGC guarantees monthly pension benefits beginning at normal retirement age, most early retirement benefits, and most benefits for survivors of deceased participants. Benefits are guaranteed to the maximum insurance limit of $2,437.50 per month for a single life annuity. The maximum insurance limit is reduced for benefits payable prior to age 65. Participants already retired will continue receiving their benefits without interruption; other plan participants will start receiving their benefits when they are eligible to retire. To assure a smooth transition, Sharon will continue day-to-day administration of the pension plans under PBGC supervision for an interim period. Participants should continue to follow previously exiting procedures to apply for retirement until notified otherwise and can call the Sharon Benefits Administration office at 412-983-6085 for additional information. PBGC is a federal insurance corporation created under Title IV of the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by American workers and retirees participating in private defined benefit pension plans. PBGC administers two insurance programs, which cover more than 41 million workers and retirees in about 67,000 plans. -0- 10/21/93 /CONTACT: Judith E. Bekelman, communications & public affairs, or Jane Hoden, public affairs specialist, both of the Pension Benefit Guaranty Corporation, 202-778-8840/
CO: Pension Benefit Guaranty Corporation Pension Benefit Guaranty Corporation (PBGC)
A federal agency that insures the vested benefits of pension plan participants (established in 1974 by the ERISA legislation).
Pension Benefit Guaranty Corporation ; Sharon Steel Corporation History of the Sharon Steel Corporation - Frank Buhl launches Mercer county into steel production.
Of the companies responsible for the growth of the iron and steel industry in the Shenango Valley, the most important and the longest surviving was the Sharon Iron Company, the ST: District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). IN: INS INS
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IH-DS -- DC023 -- 5124 10/21/93 11:17 EDT EDT
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