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Feds take over Novi supplier’s pensions

June 23, 2010

Feds take over Novi supplier’s pensions

Bankrupt auto parts maker’s plan had 4,800 workers

Detroit News Washington Bureau

Washington — The government’s insurer of pensions seized a plan covering more than 4,800 current and former workers at a Novi auto supplier.

The Pension Benefit Guaranty Corp. took over the underfunded pension plan of Grede Foundries Inc., a metal components supplier.

The PBGC took action because it said the company sold substantially all of its assets in bankruptcy proceedings, and the buyer did not assume the pension plan.

According to PBGC estimates, the Grede Foundries employees’ retirement plan is 47 percent funded, with $60.9 million in assets to cover $135.3 million in benefit liabilities.

The PBGC expects to be responsible for $69.7 million of the pension fund’s $74.4 million shortfall.

Wisconsin-based Grede filed for bankruptcy in June 2009, citing a dramatic reduction in production orders across most of its markets and the impact of bankruptcy filings by General Motors and Chrysler.

Grede Holding LLC, based in Novi, was formed by combining the assets of Grede Foundries and Citation Corp.

The new company owns six foundries, including the Iron Mountain Foundry in Kingsford, in Michigan’s Upper Peninsula.

In coming weeks, the federal agency will send notification letters to all Grede Foundries retirement plan participants.

The maximum guaranteed pension amount is lower for those who retire earlier or elect survivor benefits.

In addition, certain early retirement subsidies and benefit increases made within the past five years may not be fully guaranteed.

Last year, the PBGC seized 129 pension plans, including at least half a dozen auto supplier plans covering more than 100,000 workers and retirees.

© Copyright 2010 The Detroit News. All rights reserved.

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