5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
From Spencer's Benefits Reports: As Dana Corporation emerged from bankruptcy court protection, the Pension Benefit Guaranty Corporation called the retention of the auto parts supplier’s retirement plans a victory for the private defined benefit plan system. “Dana’s pension plans will remain under company sponsorship, which means that no worker or retiree will lose a single hard-earned retirement dollar,” stated PBGC director Charles E.F. Millard. “I am pleased to say that by working with Dana’s management over the course of the bankruptcy process, the PBGC helped achieve this success. Dana should be commended for keeping its pension commitments to its workers and executing a successful turnaround that didn’t rely on the PBGC as part of its exit strategy from Chapter 11.”
During Dana’s bankruptcy, the company continued to make its legally required funding contributions and consolidated 34 defined benefit plans into seven pension funds. The changes reduced Dana’s minimum funding contributions by $60 million through the year 2012.
These moves will significantly improve the financial health of Dana’s seven defined benefit plans, which cover more than 53,000 participants, of which almost 15,000 are active employees. By reducing the number of plans, Dana made its pension obligations more affordable and lessened the possibility that the plans would be assumed by the PBGC in the future.
Dana’s successful reorganization is the latest in a series of transactions in which the PBGC has worked with companies to help them retain sponsorship of their retirement plans. The transition continues a trend in which companies have emerged from bankruptcy with their pension plans intact without the need for the PBGC to assume control of the plans.
The PBGC also commended Solutia, Inc., for its maintenance of a defined benefit plan during reorganization. Solutia, which manufactures and supplies specialty chemicals, sponsors a defined benefit plan that covers more than 20,000 participants. The plan of reorganization confirmed by the U.S. Bankruptcy Court for the Southern District of New York provides that Solutia will continue to sponsor and maintain the pension plan.
During the bankruptcy case, Solutia continued to make pension funding contributions as required by ERISA. The PBGC actively participated in the bankruptcy proceeding, serving as a member of the official committee representing unsecured creditors.
In a press release, Mr. Millard stated, “As Solutia emerges from Chapter 11 protection, the PBGC applauds the company’s success in preserving its pension plan for the benefit of its workers and retirees. The company should be commended for keeping its commitment to its employees’ retirement security, and for not seeking to shift its responsibilities to the federal pension insurance program.”
In December 2007, after a seven-year stint operating under bankruptcy court protection, Federal-Mogul Corporation emerged with its U.S. pension plan intact, the PBGC noted in a press release. During the reorganization, the company made all minimum funding contributions to its U.S. plan, including $33.6 million in contributions in excess of the minimum during 2007. Federal-Mogul’s plan covers 33,000 participants, of which 13,000 are active employees.
Also in December 2007, the PBGC reached a $77.5 million agreement with Swedish-owned Electrolux Home Products, Inc., to protect the retirement benefits of more than 2,350 former employees. That agreement followed similar efforts by the PBGC last July to preserve Tower Automotive’s pension plan when that company’s assets were purchased by Cerberus Capital Management before Tower emerged from bankruptcy court protection. In addition, when DaimlerChrysler was nearing agreement with an affiliate of Cerberus on the sale of its North American Chrysler operations last May, the company and Cerberus entered into discussions with the PBGC on providing protection for the Chrysler pension plans. The agency’s actions resulted in Daimler’s pledge to pay $1 billion into the Chrysler plans if they terminated within five years. Chrysler also agreed to make $200 million in pension contributions over the next five years beyond the legally required minimum.
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