Milacron underfunded pension plan to be assumed by PBGC ahead of sale

By Caroline Salls

Pittsburgh, June 10 - Milacron Inc.'s underfunded pension plan will be assumed by the Pension Benefit Guaranty Corp., according to a PBGC news release.

The underfunded plan covers about 8,400 Milacron employees and retirees.

The PBGC said its move to assume the plan comes as Milacron prepares to sell substantially all of its assets through a transaction that will result in the abandonment of the pension plan to a liquidating corporate shell with no assets.

By taking this action before the sale, the PBGC said it will mature its claim for the entire pension shortfall against Milacron's foreign assets. The agency said it has previously perfected liens of about $3.6 million against these assets.

According to the release, the Milacron Retirement Plan is 45% funded, with $260 million in assets to cover $573 million in benefit liabilities.

The agency said it expects to be liable for about $285 million of the $313 million shortfall.

The PBGC said it will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which ends on June 10 and has been frozen since Dec. 31, 2007.

Milacron, a Cincinnati-based supplier of plastics-processing technologies and industrial fluids, filed for bankruptcy on March 10 in the U.S. Bankruptcy Court for the Southern District of Ohio. Its Chapter 11 case number is 09-11235.

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