The U.S. Pension Benefit Guaranty Corp. will assume responsibility for a pension plan covering 10,770 workers and retirees from auto supplier Metaldyne Corp., the agency announced Friday morning.

The PBGC expects to take over $153 million of Metaldyne's underfunded pension plan. Currently, the bankrupt company's assets fund only 53% of the plan. The company faced a shortfall of $157 million on its $334 million retirement benefit plan.

The PBGC will immediately take over the Metaldyne assets and assume control of the current plan, which ends on Friday. Metaldyne employees will no longer be able to accumulate benefits. However, workers will retain benefits they have already earned, and retirees will continue to receive their monthly checks without interruption, said PBGC spokesman Gary Pastorius.

Metaldyne has not yet announced whether it will have any defined benefit plan for future employees and did not immediately return a call for comment.

Struggling amid the slowdown in the auto sector, Metaldyne filed for bankruptcy in late May and is attempting to reorganize itself. The company produces parts for car makers, including Ford Motor Co. (F), General Motors Co. and Chrysler Group LLC.

The PBGC, a federal corporation that guarantees payment of roughly 29,000 private company benefits, already faced a deficit of $33.5 billion prior to Friday's announcement. Assumption of Metaldyne's unfunded liabilities will increase the PBGC's claims by $153 million, as the move was not included in the agency's 2008 budget.

Metaldyne is the most recent in a string of auto-suppliers whose retirement plans that have been seized by the agency.

Earlier this month, PBGC agreed to take on $6.2 billion in pension liabilities from auto supplier Delphi Corp. (DPHIQ), which is in bankruptcy protection. That pension rescue is the PBGC's second-largest ever, ranked by dollars, after that of UAL Corp.'s (UAUA) United Airlines in 2005, which totaled $7.5 billion.

In an attempt to mitigate how many pensions PBGC is required to take over, the agency launched a campaign earlier this year encouraging companies to come to it and negotiate changes to strained pension plans before plant closures or plan terminations.

-By Kristina Peterson, Dow Jones Newswires; 202-862-6619; kristina.peterson@dowjones.com

(Darrell A. Hughes contributed to this report)