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By JERRY LYNOTT [email protected]
Friday, July 01, 2005 Page: 1C
Their employer’s missed payments to the pension plan and years of
contributing only the minimum amount could cost former Techneglas workers when
they retire.
The pension plan for the bankrupt company ended on Thursday for hourly
workers at the plants in Pennsylvania and Ohio, preparing the way for the
Pension Benefit Guaranty Corporation to take over administration of the plan
for approximately 3,000 workers.
The federal corporation guarantees pension payments to workers and retirees
and assumes control of plans abandoned by companies that are unable to
continue administering them.
The company and the Glass, Molders, Pottery, Plastics and Allied Workers
International Union reached an agreement in April to terminate the plan and
the court earlier last month approved the deal.
The PBGC said the Techneglas plan has only about $67 million of the $164
million in assets needed to cover liabilities. Approximately $70 million of
the estimated $97 million shortfall will be covered by the PBGC.
“We estimate that about $27 million of the shortfall will be borne by
participants of the plan,” said Jeffrey Speicher, a PBGC spokesman.
The payments to be made to each participant will be determined by the PBGC,
Speicher said. Some people might get their full amounts while others might
not.
By law the PBGC will pay a guaranteed maximum of $45,613 a year to people
who retire at age 65 and are members of plans terminated in 2005. The amount
decreases for people who retire earlier.
Speicher stressed that Techneglas workers who retired before this year will
continue to receive their full payments.
The PBGC has over $40 billion and recently took on a $6.6 billion burden
from United Airlines. The Techneglas plan is small compared to United,
Speicher said. But down the road, the PBGC faces financial problems in the
amount of a $23 billion shortfall, he acknowledged.
Techneglas, a wholly owned subsidiary of Nippon Electric Glass of Japan,
closed its local plant on Aug. 3, 2004, and laid off approximately 700
workers. The television picture tube glass maker also shut down plants in
Columbus and Perrysburg, Ohio. In all approximately 1,100 workers were laid
off.
The company filed for reorganization under Chapter 11 bankruptcy on Sept. 1
and ceased making payments to the plan at that point, said Joseph Schaeufele,
a Techneglas executive.
Up until then the company met all the minimum contributions that were
required, he said.
The PBGC estimates Techneglas has missed $17 million in required
contributions.
Schaeufele said Techneglas will continue to administer the plan until the
PBGC takes over within the next few weeks. The company will eventually
transfer the assets to the PBGC.
He added that within the new few weeks the company also plans to file its
plan for reorganization with the bankruptcy court in Columbus where Techneglas
has its corporate office.
Techneglas also plans to sell its property in Luzerne County, said
Schaeufele. The company has had several offers and is starting the negotiation
phase for the sale, he said.