CIT Retirement Plan To Remain Ongoing, Under Firm's Control
November 03 2009 - 1:54PM
Dow Jones News
CIT Group Inc., according to court bankruptcy documents, intends
to keep its retirement pension plan that covers 6,500 workers.
The major lender to small businesses, however, isn't required to
make a contribution to the plan until April 2010. Therefore, CIT
"will not be making a contribution during the expected pendency" of
its Chapter 11 bankruptcy.
According to court documents, the approximate amount funded
annually by CIT for the retirement plan is $28.8 million.
CIT filed for bankruptcy-court protection Sunday. The financial
firm intends to complete a prepackaged reorganization by the end of
the year.
The firm's decision to keep its pension plan should come as good
news to the U.S. Pension Benefit Guaranty Corp.
The PBGC, a federal corporation that guarantees payment of
roughly 29,000 private company benefits, is faced with a $33.5
billion deficit that financial consultants estimated could surpass
$50 billion.
The pension insurer's financial solvency remains a high concern
for some administration officials and lawmakers as more companies
attempt to restructure, or close, in reaction to the economic
meltdown.
However, the Obama administration has yet to appoint a director
to the agency.
-By Darrell A. Hughes, Dow Jones Newswires; 202-862-6684;
darrell.hughes@dowjones.com
(Marie Beaudette contributed to this report.)