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Compliance June 7, 2011
PBGC Fighting Gift Basket Retailer’s Move to Dump Pensions
June 7, 2011 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) is fighting a move by Harry & David Holdings Inc. to end the pensions of its 2,700 workers and retirees.
Reported by
Rebecca Moore
In its filing for bankruptcy, the gift basket retailer asked for court approval to shed its pension plans (see Gift Basket Retailer Asks to Dump Pensions). However, PBGC said its financial analysis shows that the company will be able to emerge from bankruptcy without cutting off its workers’ pensions.
The bankruptcy court will hold a hearing on the issue on July 22, 2011.
In a news release, the PBGC noted that if the pension plan is terminated, it will pay pension benefits to Harry & David employees, and because of limits set by law, some retirees might get reduced pensions. In addition, the PBGC does not insure health benefits at all.
The retailer’s underfunded pensions include one for upper executives and a $27.4 million plan for current and former employees.