Ailing WPS Pension Fund Taken Over
PBGC Becomes Trustee of Hourly and Salaried Worker Accounts
By Staff -- Home Textiles Today, 9/5/2005
Washington — The Pension Benefit Guaranty Corporation (PBGC) has assumed responsibility for the pensions of 32,500 workers and retirees of bankrupt WestPoint Stevens.
The pension plans of WPS hourly and salaried workers ended on Aug. 8, and the PBGC became trustee of the plan on Aug. 18. The plans are 54 percent underfunded, according to PBGC.
Specifically, there is $260 million in total assets to cover $566 million in benefit promises. The PBGC will be liable for $286 million of the $306 million pension shortfall.
WPS filed for Chapter 11 on June 1, 2003 and its operating assets were sold to a group led by financier Carl Icahn in a sale that closed Aug. 8.
Under the terms of the sale, the asset purchaser did not assume the underfunded pension plans.
The PBGC stated that it will ensure WPS workers and retirees covered by the plans receive their benefits “up to the limits set by law.”
