Metaldyne underfunded pension plan to be assumed by PBGC

By Caroline Salls

Pittsburgh, July 31 - Metaldyne Corp.'s underfunded pension plan will be assumed by the Pension Benefit Guaranty Corp., according to a PBGC news release.

The plan covers about 10,770 Metaldyne workers and retirees.

The agency said its move comes ahead of a series of asset sales, one of which includes assumption of the pension plan.

If the PBGC delayed action until after the sales close, the agency said no entity would remain to finance or administer the pension plan, and the possibility of recovering on the agency's claims for unfunded pension liabilities would be severely diminished.

The Metaldyne Corp. Pension Plan is about 53% funded, with assets of $177 million to cover benefit liabilities of $334 million, according to PBGC estimates.

The agency said it expects to be responsible for $153 million of the $157 million shortfall.

According to the release, the PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the pension plan, which ended on July 31.

Retirees and beneficiaries will continue to receive their monthly benefit checks without interruption, and other participants will receive their pensions when they are eligible to retire.

Metaldyne, a Plymouth, Mich.-based maker of metal-based components, assemblies and modules for transportation-related powertrain and chassis applications, filed for bankruptcy on May 27 in the U.S. Bankruptcy Court for the Southern District of New York. The Chapter 11 case number is 09-13412.

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