Economy
Renco Group to Take Back RG Steel Pension
Written by Sandy Williams
March 4, 2016
The Renco Group will retake two RG Steel pension funds back from the Pension Benefit Guaranty Corp., ending a three year lawsuit. The deal is only the second time in PBGC’s history that a terminated pension plan was restored to an employer.
The PBGC is an entity that insures multi-employer pension plans and protects the retirement income of workers when a company terminates a plan without sufficient funds to continue to pay all benefits.
PBGC claimed that Renco lied about the impending sale of RG Steel in Sparrows Point, Md., in order to evade responsibility for the pension fund.
“Renco strongly believes, as we have throughout, that the PBGC’s allegations were erroneous and that the company acted appropriately and within its rights when it concluded a financing transaction that had the incidental effect of releasing Renco from liability for RG Steel’s pension plans,” said Renco Group spokesperson Jim McCarthy.
Under Friday’s agreement, Renco will take back the pension funds effective June 1, 2016. Renco will pay all future benefits and $35 million in shutdown benefits not guaranteed by PBGC but covered in the plan. Renco Group will also reimburse the PBGC $15 million for benefits that agency has paid since taking over the two pension funds in November 2012. At that time the pensions were underfunded by $82 million and $7.4 million.
McCarthy said restoring the plans “was the most sensible, economic and practical resolution to the dispute, and it puts an end to the significant expense and distraction of continued litigation.”
Sandy Williams
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