Released on June 22, 2010

The Pension Benefit Guaranty Corp. (PBGC), Washington, D.C., has assumed responsibility for the underfunded pension plan covering more than 4,800 former workers and retirees of Grede Foundries Inc., Milwaukee.

PBGC assumed the plan because Grede sold substantially all of its assets in bankruptcy proceedings, and the buyer did not assume the plan. Grede and its domestic units filed for Chapter 11 protection in the U.S. Bankruptcy Court in Madison, Wis., and the court approved the sale of most of its assets on Nov. 30, 2009, to its primary lender Wayzata Investment Partners LLC, Wayzata, Minn.

According to a statement from PBGC, retirees will continue to receive their monthly benefit payments without interruption, and other workers will receive their pensions when they are eligible to retire.

According to PBGC estimates, the Grede plan is 45% funded, with $60.9 million in assets to cover $135.4 million in benefit liabilities. PBGC expects to be responsible for $69.7 million of the $74.4 million shortfall. The corporation will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which ended on Nov. 30, 2009. The agency assumed responsibility for the plan on June 14.

PBGC is a federal corporation currently guaranteeing payment of basic pension benefits earned by 44 million American workers and retirees participating in over 29,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues.