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Member, Beacon International Group, Ltd.
WASHINGTON—The Pension Benefit Guaranty Corp. said Monday that it is taking over a pension plan sponsored by financially troubled Northville, Mich.-based automotive wheel manufacturer Hayes Lemmerz International Inc.
The Hayes Lemmerz plan has $204.8 million in liabilities and $110.4 million in assets. The PBGC said it expects to cover $93.7 million of the $94.4 million funding shortfall. The plan, which has been frozen since 2004, has about 4,700 participants.
The PBGC said it stepped in because Hayes Lemmerz, which filed for bankruptcy in May, hasn't met minimum funding requirements and the company cannot afford to fund the plan to reorganize successfully.
The termination of the Hayes Lemmerz plan is the third time this year that the PBGC has taken over significantly underfunded pension plans sponsored by financially ailing automotive parts suppliers.
In July, the PBGC took over the massively underfunded pension plans of financially ailing auto parts manufacturer Delphi Corp. in Troy, Mich., at a cost of about $6.3 billion, its second-largest loss ever. Delphi filed for bankruptcy reorganization in 2005 and emerged last month.
Also in July, the PBGC took over a pension plan sponsored by Metaldyne Corp., a Plymouth, Mich.-based manufacturer of metal components for automakers that also is in bankruptcy reorganization.
Hammered by huge losses and lower interest rate assumptions, the PBGC's deficit nearly doubled in fiscal 2009, jumping to $22 billion from $11.1 billion in fiscal 2008, the agency said earlier this month.