The Pension Benefit Guaranty Corp. is taking over a pension
plan sponsored by bankrupt auto parts manufacturer Collins & Aikman
Corp.
The Collins & Aikman plan, which has about 21,000
participants, is 58 percent funded, with $434 million in liabilities and $253
million in assets. The PBGC expects to be liable for about $161 million of the
$181 million funding shortfall.
Assumption of the plan on the PBGC’s balance sheet as an
estimate of the liability was included in the PBGC’s fiscal 2006 financial
statements.
The PBGC said it is taking over the plan because Troy,
Michigan-based Collins & Aikman already has missed making $7.6 million in
required contributions and the plan will be abandoned when the company sells off
its assets, as contemplated in its bankruptcy proceedings.
Collins & Aikman filed for Chapter 11 bankruptcy nearly
two years ago. A confirmation hearing on the company’s liquidation plan of
reorganization is scheduled for April 19 in U.S. Bankruptcy
Court.
Filed by Jerry Geisel of Business Insurance, a sister publication
of Workforce Management. To comment,
e-mail editors@workforce.com.
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