PBGC insures defined benefit plans only?those plans that promise to pay a specific monthly benefit at retirement. PBGC does not insure retirement plans that do not promise specific benefit amounts, such as profit sharing or 401(k) plans.

The PBGC statement said the Reliance Insurance Company Employees Retirement Plan was terminated today, with assets of about $143 million to cover benefit liabilities of roughly $267 million, according to PBGC estimates.

Noting that the plan is underfunded by $124 million, PBGC said it will add its assets to those of the Reliance plan to make sure the guaranteed pension benefits of Reliance employees are paid.

PBGC said its action does not affect the Reliance Holding Group pension plan, which has not terminated.

PRGC Executive Director Steven Kandarian said, "PBGC is stepping in because [Reliance Insurance Company] is liquidating and the pension plan will be unable to pay benefits when due."

He explained that retirees will continue to receive monthly checks subject to federal maximum guarantees and that the benefits of other employees will be kept safe until they reach retirement age.

Under federal pension law, the 2002 maximum guaranteed benefit for workers retiring at age 65 is $3,579.99 per month (or $42,954.60 per year). Maximum guarantees are adjusted to retirees older or younger than age 65 and for those who choose survivor benefits.

PBGC estimates show that most participants will receive their full benefit.

Workers and retirees do not need to take any action, PBGC said, but those who have questions about benefits or who wish to retire may contact PBGC's Customer Service Center at 1-800-400-7242 (TTY/TDD users can call 1-800-877-8339 and ask to be connected to 800-400-7242.)

PBGC said that information about the Reliance pension plan will also be posted on the PBGC Web site in the Trusteed Plans Info section.

PBGC guarantees basic pension benefits earned by more than 43 million American workers and retirees participating in 38,000 private-sector defined benefit pension plans. PBGC's financing comes from insurance premiums paid by companies whose plans it protects and from PBGC's investment returns. The agency receives no funds from general tax revenues.