Powermate underfunded pension plan assumed by PBGC amid liquidation

By Caroline Salls

Pittsburgh, Oct. 21 - Powermate Corp.'s underfunded pension plan has been assumed by the Pension Benefit Guaranty Corp., according to a PBGC news release.

The plan covers 600 former Powermate workers and retirees.

The PBGC said it stepped in because the Powermate Consolidated Pension Plan faced abandonment, because the company is liquidating all of its assets under bankruptcy proceedings and because there would be no entity left to finance or administer the plan.

The agency said it estimates that the Powermate Consolidated Pension Plan is 76% funded with assets of $6.9 million to cover $9.1 million in benefit liabilities. The PBGC said it expects to be responsible for the entire $2.2 million shortfall.

The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which ended on June 1, 2008. Powermate's plan was frozen on Jan. 31, 2004.

Powermate, an Aurora, Ill.-based manufacturer of portable and standby electric generators, air compressors, air tools, pressure washers and accessories, filed for bankruptcy on March 17, 2008 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 08-10498.

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