WASHINGTON - A federal agency said Friday that it has taken responsibility for pension plans covering nearly 900 workers and retirees of Kaiser Aluminum & Chemical Co.
The Pension Benefit Guaranty Corp., which insures private defined-benefit pension plans, estimated that the four pension plans it is taking over have combined assets of $20.1 million to cover promised benefits totaling $29.6 million.
The agency said it will be liable for $2.7 million of the $9.5 million shortfall.
Kaiser Aluminum & Chemical Co. is a subsidiary of Kaiser Aluminum Corp., based in Foothill Ranch, Calif.
The four pension plans the PBGC is taking responsibility for are known as the Bellwood Plan, the Los Angeles Extrusion Plan, the Sherman Plan and the Tulsa Plan.
For these pension participants, the maximum annual benefit is $47,659 for workers who wait until 65 to retire, the agency said. Workers who retire before 65 get smaller benefits. That is the maximum benefit for plans that terminated in 2006, as the four Kaiser pension plans did.
The agency said that assumption of these plans will "have no material effect'' on PBGC's current balance sheet. That's because the agency's 2006 financial statement already included an estimate of the four plans' liability.
Helped by a new pension law, the PBGC reduced its deficit to $18.1 billion last year, an improvement from a shortfall of $22.8 billion recorded in 2005.
The 2006 pension law aims to shore up funding for traditional pensions, also known as defined-benefit pension plans.
The PBGC had seen its debt swell as bankrupt steel and airline companies dumped their pension responsibilities onto the agency.
The agency's operations are financed by insurance premiums paid by companies that sponsor traditional pension plans. It also earns money from investments and receives funds from pension plans it takes over. The agency is not funded through tax revenues.
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