The Pension Benefit Guaranty Corp. (PBGC), the US federal agency that protects employee pension plans has filed a USD 2.3 million lien against Oneida Ltd.
The PBGC filing against Oneida and eight aff…
The Pension Benefit Guaranty Corp. (PBGC), the US federal agency that protects employee pension plans has filed a USD 2.3 million lien against Oneida Ltd. The PBGC filing against Oneida and eight affiliates was made on 20 September 2004 after the company missed a 15 July 2004 payment into its retirement fund. In May 2004, Oneida informed its 900 workers and approximately 1,500 retirees by letter that it had missed a payment. It also froze pension accruals for current employees and stopped paying medical insurance for retirees. In a quarterly report filed 14 September 2004 with the U.S. Securities and Exchange Commission, Oneida said it hoped to obtain permission from the Internal Revenue Service to defer making USD 6.5 million in payments into its retirement account through the end of 2004. “During the 2Q, the company has determined it will not make any scheduled remaining 2004 pension plan contributions in an effort to conserve cash,” Oneida said. Company officials said contributions for 2003 could not be waived. As of 31 July 2004, the company said it had accrued pension liabilities of USD 35 million. The PBGC is the federal agency which since 1974 has been responsible for enforcing timely and uninterrupted payment of pension benefits by companies. It takes over pension plans when companies go out of business or are in financial distress. Oneida has been in financial difficulties for some time. The company lost USD 99.2 million in 2003, and USD 48.3 million in the 2Q 2004. Company executives blamed the losses on competition from foreign firms. Earlier in 2004, the company closed or sold plants in Buffalo, China, Italy and Mexico, and on 9 September 2004 announced that it would close its last remaining manufacturing plant in Sherrill, New York state during the 1Q 2005 with the loss of 500 jobs. Oneida will import flatware, serve ware, china and glassware from foreign producers for resale under the Oneida brand. About 400 workers will continue to work at its headquarters in Oneida and local warehouses.