July 25, 2008
Elkem to Strengthen Pension Plan for Workers, Retirees
By George Hohmann, Charleston Daily Mail, W.Va.
Jul. 25--CHARLESTON, W.Va. -- The federal government's pension insurer announced it has reached an agreement with Elkem Metals Inc. that will strengthen the pension plan of 1,600 Elkem workers and retirees.
The Pension Benefit Guaranty Corp. said that as a result of the property sales, about 80 percent of the Elkem pension plan's active participants were separated from employment with the company.
Elkem's retirement plan remains ongoing and under the company's control, the Pension Benefit Guaranty Corp. said. However, under the federal pension law that created the Pension Benefit Guaranty Corp., the agency seeks protection in the form of a bond or escrow when more than 20 percent of a company's employees covered by a pension plan are separated from their jobs with the employer.
As a result of the sale of the two plants, Norwegian-owned Elkem incurred an obligation for the payment of $50.7 million in potential liabilities in the event the pension plan was terminated, the Pension Benefit Guaranty Corp. said.
To resolve the obligation, the company agreed to make a $17.3 million payment, the agency said. In addition, Elkem and its U.S. owners agreed to pay up to an additional $22 million if the Pension Benefit Guaranty Corp. assumes responsibility for the pension plan at a later date.
In a prepared statement, Pension Benefit Guaranty Corp. Director Charles E.F. Millard said, "We appreciate Elkem's desire to work with us to achieve an outcome that is favorable to its employees and retirees."
The Pension Benefit Guaranty Corp. is a federal corporation created by the Employee Retirement Income Security Act of 1974. According to the agency's Web site, it currently protects the pensions of nearly 44 million workers and retirees in 30,330 private defined benefit pension plans.
The agency receives no money from general taxes. It is financed by insurance premiums set by Congress and paid by sponsors of defined benefit plans, investment income, assets from pension plans in which it serves as trustee, and recoveries from companies formerly responsible for the plans.
Contact writer George Hohmann at [email protected] or (304) 348-4836.
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Copyright (c) 2008, Charleston Daily Mail, W.Va.
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