Electrolux AB struck a deal with the Pension Benefit Guaranty Corp. (PBGC) worth US$77.5 million that is aimed at protecting the retirement benefits of more than 2350 former employees of Electrolux.
The agreement stems from the March 2006 closing of an Electrolux factory in Greenville, MI, U.S.
The Employee Retirement Income Security Act of 1974 requires the PBGC to seek financial protection for a pension plan when more than 20% of a company's employees who are covered by the plan lose their jobs due to a plant closing.
Under the agreement, Electrolux waived an existing $42.5 million credit balance in its pension fund that would have excused it from making further pension contributions up to that amount. The company also agreed to make $35 million in additional contributions to the pension plan over the next five years.