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PBGC MOVES TO PROTECT JESUP GROUP PENSIONS

 PBGC MOVES TO PROTECT JESUP GROUP PENSIONS
 WASHINGTON, July 21 /PRNewswire/ -- The Pension Benefit Guaranty


Corporation (PBGC) has taken over the pensions of 5,300 workers and retirees of the Uniroyal Plastics Company Inc. (part of the Jesup Group, Inc.) Pension Plan, which is underfunded by $157 million, and will not be able to make all its July benefit payments.
 "PBGC has taken the action to make sure retirees receive their pension benefits as guaranteed by law," said PBGC Executive Director James B. Lockhart. "The fact that pension plans can run out of money points out the urgent need for legislative reforms to improve pension funding and keep pensions solvent," he said.
 Noting there are more retirees than active workers (approximately 3,000 of the 5,300 plan participants are retired), Lockhart said, "Even if Jesup had made all of its pension contributions, the funding amount required by current law still would have been less than the benefits paid out annually."
 The Jesup Group, which manufactures and sells plastic and rubber based products to the automotive and aircraft industries, made only partial payments of its 1989, 1990 and 1991 contributions. PBGC has perfected liens for $39 million against the company and its subsidiaries for the missed contributions. In addition, PBGC has filed claims in the bankruptcy court for the pension underfunding. PBGC is in discussion with the company to reach a settlement on recoveries along with other creditors.
 The company requested a distress termination with union agreement last December after six of its subsidiaries (Polycast Technology Corp., Uniroyal Adhesives & Sealants Co., Inc., Uniroyal Engineered Products, Inc., Ensolite, Inc., U.E. System, Inc., and Plastics Support Corp.) filed for bankruptcy under Chapter 11 reorganization. The plan has assets of only $7.5 million and benefit liabilities of about $164 million as of Feb. 20, 1992, the official date of plan termination.
 The Bush administration has proposed legislation that would improve minimum funding rules, clarify and improve PBGC's standing in bankruptcies to reduce losses in the event of termination, insure future benefit increases only when a plan is fully funded, and better reflect the tens of billions of expected losses through a change to accrual accounting. PBGC's current $2.5 billion deficit includes the losses on the Uniroyal plan.
 By becoming trustee of the plan, PBGC makes up the funding shortfall and takes over the responsibility for payment of benefits, subject to legal limitations on the amount and types of benefits it can guarantee. Most retirees will receive the same benefits they are now getting. Based on preliminary information, there will be some reduction in benefits for some retirees, primarily among those who were highly compensated because their benefits exceed PBGC's maximum guarantee.
 Jesup, which is headquartered in Sarasota, Fla., has its main facilities in Mishawaka, Warsaw, and Elkhart, Ind., with other facilities in various locations, including Stamford, Conn., Stoughton, Wis., and Port Clinton, Ohio. The majority of retirees are located in the Mishawaka/South Bend, Ind. area, Port Clinton, Chicago, and Plant City and Lakeland, Fla.
 PBGC is a federal agency created by the Employee Retirement Income Security Act (ERISA) to guarantee payment of basic retirement benefits earned by American workers participating in private defined benefit plans. PBGC administers two insurance programs, which cover more than 40 million workers and retirees in about 85,000 pension plans.
 -0- 7/21/92
 /CONTACT: Judith E. Bekelman, director, communications & public affairs, or Jane Hoden, public affairs specialist, both of the Pension Benefit Guaranty Corporation, 202-778-8840/ CO: Pension Benefit Guaranty Corporation; Uniroyal Plastics Company,
 Inc.; Jesup Group, Inc. ST: District of Columbia IN: SU:


IH -- DC019 -- 1330 07/21/92 12:20 EDT
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Publication:PR Newswire
Date:Jul 21, 1992
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