PBGC-Renco Settlement Highlights Risk and Reach of ERISA's Pension Underfunding Joint and Several Liability Provisions

The Pension Benefit Guaranty Corporation’s widely reported recent settlement agreement with The Renco Group, Inc. illustrates the risks inherent in pursuing certain transactions where underfunded pensions are present. Among the highlighted risks is the potential for the joint and several liability provisions of federal pension law to enable the PBGC to reach for assets unrelated to a pension plan sponsor’s business, including personal assets of controlling persons, to satisfy underfunded pension claims.