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PBGC Protects Pensions at Crucible

01/14/2010 - The Pension Benefit Guaranty Corp. has assumed responsibility for six underfunded pension plans covering nearly 3600 former workers and retirees of Crucible Materials Corp.

The Pension Benefit Guaranty Corp. (PBGC) has assumed responsibility for six underfunded pension plans covering nearly 3600 former workers and retirees of Crucible Materials Corp., a manufacturer of specialty metal products based in Syracuse, N.Y., with operations in Pittsburgh, Pa.
 
The PBGC stepped in because the plans failed to meet minimum funding requirements and faced abandonment due to the company’s liquidation in bankruptcy proceedings; there would have been no entity left to finance or administer the plans.
 
Crucible retirees will continue to receive their monthly benefit checks without interruption, according to the PBGC, and other workers will receive their pensions when they are eligible to retire.
 
Collectively, the plans are 58% funded, with assets of $147.1 million to cover $277.3 million in benefit liabilities, according to PBGC estimates. The agency expects to be responsible for $106.4 million of the $130.2 million shortfall.
 
The plans are:
  • ▪Crucible Materials Corp. Specialty Metals Division – Syracuse and United Steelworkers of America for Separate Plan
  • Crucible Materials Corp. Salaried Retirement Plan
  • Crucible Materials Corp. Service Centers Division Retirement Plan for Cleveland Warehouse Employees
  • Trent Tube Pension Plan
  • Trent Tube Division Carrollton, Georgia Pension Plan
  • Crucible Compaction Metals Division USW Pension Plan.
The plans ended on Sept. 30, 2009. The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan. Within the next several weeks, the agency plans to send notification letters to all participants in the plans.
 
Crucible’s products were primarily marketed to the automotive and related industrial machining industries. The employee-owned company has been in business for more than 100 years. Crucible sought Chapter 11 protection in the U.S. Bankruptcy Court in Wilmington, Del., on May 6, 2009, with the intent to reorganize. But faced with limited financing and poor market conditions, the company decided to sell substantially all of its assets.
 
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 29,000 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.