Posted on: Friday, October 17, 2003
Pension regulator will sue
By Deborah Adamson
Advertiser Staff Writer
The federal government's pension fund regulator plans to sue a defunct 'Aiea baking company to recover $2.5 million in pension funds that the agency will have to cover to meet obligations owed to workers.
That news comes a day after the Pension Benefit Guaranty Corp. sought court approval to take over the pension fund of Hawaii Baking Co.
"We will file a claim for the amount of the shortfall in bankruptcy court," said Jeffrey Speicher, the regulator's spokesman.
Hawaii Baking, once the state's second largest wholesale bakery, closed its doors last year. More than a dozen lawsuits have been filed against the company to recover money owed to suppliers, the union, landlord and workers.
There also are federal investigations against the company and some of its executives for allegedly collecting medical insurance premiums and not paying insurance companies. Many workers found out they had no healthcare coverage only when they went to the doctor.
'Aiea resident Charlie Sham, a former machine operator at Hawaii Baking, expressed anger over "a lot of hardship" that he said he and his co-workers have undergone.
On Wednesday, the federal regulator asked a court to make it the pension's trustee and terminate the plan under Hawai'i Baking. The Pension Benefit Guaranty Corp., which also functions as a government-backed pension insurer, would continue to make payments to beneficiaries so there would be no disruption.
The regulatory agency said Hawai'i Baking has missed $1.9 million in payments covering 217 employees. The company did not fully fund the pension.
"We're stepping in and asking the judge to make us the trustee so we can administer the benefits," Speicher said.
Hawai'i Baking attorney Michael Cordier said he has not seen the complaint and cannot comment on behalf of his client.
The pension fund has assets of $2.5 million but liabilities of more than $5 million, the regulator said.
Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.
