Electrolux to add $35 mln to U.S. pension fund
STOCKHOLM (Reuters) - Electrolux <ELUXb.ST> said on Thursday it had agreed to inject $35 million over five years into the pension fund of workers laid off by the world's second-biggest home appliances maker in the United States.
The agreement with the U.S. Pension Benefit Guaranty Corporation (PBGC) referred to workers laid of when Electrolux shut down a plant last year in Greenville, Michigan.
"We recently entered into an agreement with the PBGC to contribute $7 million per year for five years into the Electrolux Pension Plan for Bargaining Employees," the firm said in a statement e-mailed to Reuters.
Electrolux said the contributions, which would begin in 2008, were consistent with a plan followed by the firm in recent years for making discretionary contributions to its U.S. pension plans above minimum requirements.
It would therefore not negatively affect cash flow, the firm said, adding the agreement would have no impact on the pensions of its former employees.
The Financial Times reported the U.S. agency that insures pension benefits would announce on Thursday the agreement, under which the Sweden-based firm had also agreed to waive a $42.5 million credit balance that would excuse it from injecting any further funds up to that amount.
The contribution covered the amount by which the plan was underfunded, according to PBGC assumptions, at the time of the closure of the Greenville plant, the firm said.
Electrolux said the plan had been fully funded since the end of 2006 and that the PBGC assumptions for the valuation of the liabilities of the plan were more conservative than "either statutory funding rules or accounting standards."
(Reporting by Niklas Pollard and Jerker Hellstrom, Editing by Erica Billingham)