August 21, 2012 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) will pay retirement benefits for nearly 1,300 current and future retirees of SP Newsprint Co.
The agency is moving to take responsibility for SP Newsprint's two pension plans because the company intends to sell its assets in bankruptcy proceedings and the buyers are not assuming the pension plans.
SP Newsprint, a newsprint producer based in Greenwich, Connecticut, and its affiliates filed for Chapter 11 protection in the U.S. Bankruptcy Court in Wilmington, Delaware, on November 15, 2011. The filing was spurred by a decline in demand for newsprint products. The company's two pension plans are the SP Newsprint Co. Pension Plan and the SP Newsprint Co. Union Pension Plan. According to PBGC estimates, collectively the plans are 49% funded with $74.4 million in assets to cover $150.7 million in benefits. The agency expects to cover $73 million of the $76.3 million shortfall.