The Pension Benefit Guaranty Corp. is taking over the benefits for more than 4,440 current and future retirees of Constar Inc., a maker of plastic containers.
The Trevose, Pa., company is selling most of it assets in two bankruptcy auctions, but the buyer will not assume pension obligations.
The PBGC estimated the pension plan has $89.6 million in assets and $135 million in liabilities, leaving it 66 percent funded. The agency said it would cover all but $700,000 of the gap.
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The agency said it would pay all benefits owed Constar plan participants up to about $59,000 a year for a retirees age 65. Current retirees will see no interruption in payments.
The company filed for bankruptcy in December after losing its largest account, Pepsi. The auctions will sell off domestic assets as well as stock or asset of its affiliates in the U.K. and Holland. The leading bidder is Amcor Rigid Plastics USA Inc., which is based in Ann Arbor, Mich.
The agency's calls for increases in the premiums companies pay to provide the safety net have been controversial, although the recent budget approved by Congress included some raises.
The PBGC is the government's insurance agency for private pension plans that include about 44 million participants. It pays benefits to 1.5 million retirees whose plans it took over.
The agency has about $85 billion in assets from the pension plans it has taken over, premiums and investment income to cover its annual operating losses. But it estimates its potential exposure to future pension losses from financially weak companies at about $292 billion.
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