PBGC Negotiates Pension Funding for Sand Springs Workers
08/17/2011 - The Pension Benefit Guaranty Corporation has reached an agreement with Gerdau that will add $18.6 million in additional pension funding covering more than 780 workers and retirees in Sand Springs, Okla.
The Pension Benefit Guaranty Corporation has reached an agreement with Gerdau that will add $18.6 million in additional funding for two pension plans covering more than 780 of the company’s workers and retirees in Sand Springs, Okla.
The agreement stems from the company’s October 2009 shutdown of the former Sheffield Steel plant in Sand Springs, which impacted the Retirement Plan for Employees of Sheffield Steel Corp. and the Sheffield Steel Corp. Pension Agreement Plan.
Under the new agreement, Gerdau will pay $18.6 million to the two plans over the next three years. The payments are in excess of the company's required plan contributions.
“Our goal is to strengthen both the companies we work with and their pension plans,” said PBGC Director Josh Gotbaum. “Gerdau’s efforts will give its employees a more secure retirement.”
The Employee Retirement Income Security Act of 1974 (ERISA), the federal pension law that created PBGC, requires the agency to seek additional protection when more than 20% of a company's employees covered by a pension plan lose their jobs due to a cessation of operations at a facility. The agency strives to create settlements that safeguard pension plans, while recognizing the business needs of the companies that sponsor them.
Gerdau is the second-largest mini-mill steel producer in North America. The company’s products are sold to steel service centers, steel fabricators, or directly to original equipment manufacturers for use in industries such as residential construction, metal building, manufacturing and the automotive sector.
The PBGC is a federal corporation that guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 27,500 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues and never has. Operations are financed entirely by insurance premiums paid by companies that sponsor pension plans and from the assets and recoveries on behalf of plans that have been assumed by PBGC.
