This is a printer friendly version.
FOR IMMEDIATE RELEASE
July 13, 2007
PBGC Public Affairs
202-326-4343
PBGC Protects Pensions at Keller Manufacturing Co. Inc.
WASHINGTON— The Pension Benefit Guaranty Corporation (PBGC) today announced it has assumed responsibility for the underfunded pension plan covering 477 former employees of furniture manufacturer Keller Manufacturing Co. Inc. of Louisville, Ky.
The PBGC stepped in because Keller Manufacturing is unable to fund the pension plan. The agency found that the company will not be able to stay in business unless the pension plan is terminated and thus meets the legal criteria for a distress termination under the Employee Retirement Income Security Act (ERISA). Retirees and beneficiaries will continue to receive their monthly benefit checks without interruption, and other participants will receive their pensions when they are eligible to retire.
According to PBGC estimates, the Keller Manufacturing Company Inc. Employees Pension Plan is 66 percent funded, with nearly $9 million in assets to cover $13.5 million in benefit liabilities. The PBGC expects to be liable for the entire $4.6 million shortfall. The agency will take over the assets and use PBGC insurance funds to pay guaranteed benefits earned under the plan, which terminated on July 26, 2006. The PBGC became trustee of the plan on June 29, 2007. Assumption of the plan's unfunded liabilities will have no material effect on the PBGC's financial statements, according to generally accepted accounting principles.
Within the next several weeks, the PBGC will send notification letters to all plan participants. Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminated in 2006 is $47,659 per year. The maximum guaranteed amount is lower for those who retire earlier or elect survivor benefits. In addition, certain early retirement subsidies and benefit increases made within the past five years may not be fully guaranteed.
Workers and retirees with questions may consult the PBGC Web site, www.pbgc.gov or call toll-free at 1-800-400-7242. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask for 800-400-7242.
Retirees of Keller Manufacturing who draw a benefit from the PBGC may be eligible for the federal Health Coverage Tax Credit. Further information may be found on the PBGC Web site at http://www.pbgc.gov/workers-retirees/benefits-information/content/page13692.html.
The PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974. It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 30,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns.
