PBGC seeks court OK to assume underfunded Hayes Lemmerz pension plan

By Caroline Salls

Pittsburgh, Nov. 30 - Hayes Lemmerz International, Inc.'s underfunded pension plan would be assumed by The Pension Benefit Guaranty Corp. under a PBGC motion, according to a news release.

The agency said the plan, which was frozen on Dec. 31, 2004, covers more than 4,780 Hayes Lemmerz workers and retirees.

According to the release, the pension insurer is stepping in because Hayes Lemmerz has failed to meet the minimum funding requirements, and the company cannot afford to fund the pension plan and successfully reorganize.

If the company is unable to reorganize in bankruptcy proceedings, the pension plan would be abandoned following a sale of substantially all of the company's assets. By taking action now, the PBGC said it prevents further deterioration of the plan's condition.

Specifically, the Hayes Lemmerz International, Inc. Retirement Income Plan is 54% funded, with assets of $110.4 million to cover benefit liabilities of $204.8 million, according to PBGC estimates.

The agency said it expects to be responsible for $93.7 million of the $94.4 million shortfall.

The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which ended on Nov. 30, according to the release.

Hayes Lemmerz is a Northville, Mich., maker of automotive and commercial highway wheels. It filed for Chapter 11 on May 12, 2009 in the U.S. Bankruptcy Court for the District of Delaware. Its case number is 09-11655.

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