October 24, 2006
Feds take control of Republic Storage pensions
By Paul M. Krawzak
Copley News Service
WASHINGTON - A federal agency has taken control of pensions at
Republic Storage Systems in Canton, ensuring that almost 900
current or former employees will receive retirement benefits.
The Pension Benefit Guaranty Corp., which insures corporate
pensions, on Monday announced it has taken responsibility for
two pension plans at the formerly bankrupt company.
Retirees of the company will continue to receive their monthly
benefit checks without interruption, the agency said. Current or
former employees who have not yet reached retirement age will
receive their benefits when they become eligible.
An undetermined number of retirees and employees will see a cut
in their benefits because the agency insures pensions up to a
maximum of $47,659 a year for a person retiring at age 65, the
Gary Pastorius, a spokesman for the federal agency, said that
amount falls short of pension benefits awarded to the most
highly paid Republic employees.
The agency has not yet determined how many will get reduced
pensions, he said. On average, about 10 percent of retirees see
a cut in their benefits when their pensions are taken over by
Republic manufactures lockers, industrial and commercial
shelving, storage racks and shop equipment.
Chrysalis Capital paid $20 million for Republic in May, after
the company filed for Chapter 11 bankruptcy protection in March.
Officials said damage from flooding in 2003, the doubling of
steel prices in 2004 and costly retiree health-care and pensions
prevented the firm from paying its bills.
Chrysalis, a Philadelphia-based equity firm, did not assume
sponsorship of the pension plans when it bought Republic.
The two plans cover 872 employees, including 635 in a bargaining
unit represented by the Steelworkers union and 237 nonunion
The union plan includes 376 active workers, 179 retirees and 80
who were vested in the plan when they left the company.
Those covered by the nonunion plan include 109 active employees,
66 retirees and 62 who were vested when they left the company.
Company retirees lost their health insurance, which is not
insured by the federal agency. Employees of the company who
invested in the Republic stock plan also lost their investments.
The reconstituted Republic replaced its pension plans with a tax
deferred 401(k) retirement savings plan, said Eric Cook, chief
No comment on the federal action was immediately available from
the Steelworkers union.