Owens Corning is seeking U.S. Bankruptcy Court permission to contribute $106 million to a pension plan covering 29,000 U.S. employees and retirees.
The move would boost plan funding to 97 percent from 86 percent, and would avert penalties imposed by the quasi governmental Pension Benefit Guaranty Corp. when underfunded plans fall below certain thresholds, according to a filing in bankruptcy court in Delaware.
Jason Saragian, a spokesman for the Toledo manufacturer of building materials and fiber-glass, said the proposed contribution is significantly higher than the required contribution, and is on top of $600 million contributed to company pension plans since October, 2000, when OC filed for Chapter 11.
Many firms have had to pump up pension plans in recent years, largely because of diminished returns from investments, said Gary Pastorius, spokesman for the pension insurer. "A plan's funding condition is a moving target," he said. "Equity values change every day. Interest rates change."
When funding remains below 90 percent, insurance premiums levied by the Pension Benefit firm are significantly higher than the $19 per participant paid each year by plans above that threshold.
Judge Judith Fitzgerald has been asked to act on OC's request Aug. 29 at the firm's monthly bankruptcy hearing in Wilmington, Del.
The company wants to make the contribution by Sept. 15. The payment would come from profits, and would not require officials to tap bank credit lines, the court filing said.
The payment proposal, which has been approved by OC's board of directors, follows an annual review of the pension plan by consultant Watson Wyatt Worldwide.
If approved, the payment would follow contributions of $231 million 2004 and $185 million in 2003.
OC filed for Chapter 11 to escape multibillion dollar asbestos liability, but has otherwise remained profitable.
Five years after the firm sought bankruptcy court protection, the case is bogged down by squabbling among creditors over who will get what in a re-payment plan and speculation that Congress will pass a pending measure that would provide relief to former producers of asbestos-containing products.
Contact Gary Pakulski at:
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