PBGC officials said they seized the bankrupt Cambridge, Massachusetts company’s pension after its July 31 plan termination – the day Polaroid completed its asset sale to OEP Imaging Corp., an affiliate of Bank One’s One Equity Partners. The plan covers more than 11,000 former Polaroid workers. The 6,000-member Polaroid Retirees Association had lined up with a group of shareholders in an unsuccessful attempt to block the sale.
PBGC estimates that the Polaroid Pension Plan, with assets of $657 million and benefit liabilities of $981 million, is underfunded by about $324 million.
Under federal pension law, the maximum pension guaranteed for workers in plans that terminate in 2002 is $3,579 a month (or $42,954 a year) for persons retiring at age 65
PBGC is a federal corporation created under ERISA. It currently guarantees payment of basic pension benefits earned by about 44 million American workers and retirees participating in over 35,000 private-sector defined benefit pension plans.
Agency operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by PBGC’s investment returns.
Meanwhile, there has been no public announcement about the outcome of a federal probe into Polaroid for failing to safeguard its retirement plan funds as it was filing for bankruptcy last year .