NUMMI Pension Funds Pass to PBGC

The Pension Benefit Guaranty Corporation (PBGC) announced yesterday it will assume responsibility for the underfunded pension plan of the 5,800 employees and retirees of New United Motor Manufacturing (NUMMI), pending the plant's liquidation by the end of the month.

Fearing the pension plan "will be abandoned as a result [of the closure] and unable to pay benefits when due." The NUMMI/UAW plan is currently 55 percent funded, with assets of $161 million to cover benefit liabilities of $292 million. PBGC hopes to cover $126 million of the $131 million shortfall.

"The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which ends effective March 3, 2010. 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," PBGC says in a release.

Meanwhile, California braces itself for the closure of the plant and the 50,000 people who will go under unemployment as a result, from both the plant itself and the related businesses.

"Californians are deeply concerned about how the loss of this plant might affect their economy, their state and their lives, and it is the job of this Commission to help find the answers to those questions. It is a testament to the quality of leaders on this panel that they have been more than willing to take up this challenge," State Treasurer Bill Lockyer said last week, when a 10-member panel of California leaders convened to discuss the possible future and the effects of the closure.