The namesake company of Detroit brewer Stroh's is asking the government to take over its pension plan, which has about 3,000 participants, most of whom are already retired.
Stroh Cos. Inc., which stopped brewing beer in 1999 and now manages real estate developments and investments, blamed low interest rates and new actuarial assumptions about future pension liabilities for its decision to petition the Pension Benefits Guaranty Corp., the government's pension plan insurer, to assume all of the plan's liabilities. Stroh said its pension fund has $140 million in it and $40 million in unfunded liabilities.
"We are taking this action for two reasons: to protect the retirement incomes of pension plan participants and their beneficiaries, while also preserving the financial health of our businesses," said John Stroh III, chairman of Stroh, in a statement. "We are taking this proactive action now to sustain the financial viability of the companies and to keep them in business, while protecting the retirement incomes of the pension plan's participants."
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Stroh said that if the PBGC agrees to take over its pension plan, all plan participants would likely receive full benefits. The PBGC caps pension payments to individuals with the 2014 limit at $60,000 per year. Stroh says all participants in the pension plan receive less than that amount.
The Stroh Brewing Co. began its 150-year run in Detroit in 1850. Declining sales and consolidation in the U.S. brewing industry led to its downfall.
The PBGC was established in 1974 as part of the Employee Retirement Income Security Act. In 2012, the agency collected $2.6 billion in premiums, but paid out $5.8 billion. It had $82 billion is assets and projected future liabilities at $105 billion.
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