WASHINGTON – A federal agency announced Thursday that is has taken responsibility for the pensions of 6,200 workers and retirees of Amcast Industrial Corp., an auto parts maker.
The Pension Benefit Guaranty Corp. said the company, which filed for Chapter 11 (search) bankruptcy protection in late 2004, met all legal criteria under federal law to transfer its pension liabilities to the pension insurance program.
The PBGC estimates that the company's pension plan is 47 percent funded, with $77 million in assets to cover $166 million in benefit promises. The agency said it will be lsmaller benefits.
The Dayton, Ohio, company has production facilities in Alabama and Indiana, the PBGC said.
The takeover of Amcast's pension obligations comes against the backdrop of mounting concern on Capitol Hill about the financial health of the PBGC, which is running a deficit that tops $20 billion.
Lawmakers' concerns were heightened when the agency assumed responsibility for United Airlines' pension plans earlier this year.
Legislation is moving through Congress that aims to shore up the agency and to overhaul rules governing private pension plans.
Private analysts and others worry that a taxpayer-funded bailout could happen at some point if the agency cannot get on firmer financial footing.
The agency's operations are financed by insurance premiums, which are paid by companies that sponsor traditional pension plans. It also earns money from investments and receives funds from pension plans that it takes over. The agency is not funded through tax revenues.
Federal Reserve Chairman Alan Greenspan, in a congressional appearance last week, said while more moves by companies to dump pension plans on the PBGC would be troubling that shouldn't threaten the overall economy.