- Hostess Brands, maker of Twinkies and Ding Dongs, accounted for 24 percent of all those contributions to the multi-employer pension. It stopped making contributions in 2011 and then filed for bankruptcy in 2012, weighed down by weakened demand, rising competition, and large levels of debt. Federal courts allowed it to escape without paying the pension fund $1 billion in obligations.
The pension fund immediately went from being one of the healthiest in the country to one of the most at risk.
The pension was now in a category known as the “red zone,” which means if changes are not made it will likely become insolvent, and beneficiaries might just get pennies on the dollar when they retire. Some other pensions are even in worse shape.
For more background on Hostess' Bankruptcy and Liquidation