The Pension Benefit Guaranty Corporation (PBGC) announced Wednesday that it took over the plan, which the agency said would have been abandoned after Circuit City’s assets are liquidated during federal bankruptcy proceedings.
The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which ended on March 31, 2009. The agency became trustee of the plan on Tuesday.
“The Circuit City pension plan is now under the protection of the PBGC, America’s pension insurance program,” said Acting Director Vince Snowbarger in a video message, posted on a special PBGC Web page. “Circuit City workers now join the almost one and a half million Americans who rely on the PBGC for their pension benefit.”
According to the announcement, the Retirement Plan of Circuit City Stores Inc. was 82% funded, with $284 million in assets to cover $349 million in benefit liabilities. Of the estimated $64 million shortfall, the agency would be responsible for about $62 million.
The PBGC said it is still getting updated plan asset and liability information and will revise its underfunded estimate after getting final data.
Participants are subject to the distribution limits in effect on November 10, 2008, which set a maximum guaranteed amount of $51,750 for a 65-year-old.
The PBGC said assumption of the plan’s unfunded liabilities will increase the PBGC’s claims by $62 million and was not previously included in the agency’s fiscal year 2008 financial statements (see PBGC Funding Gap Ballooning as Plan Terminations Increase ).
More information is at the agency’s Circuit City page available at www.pbgc.gov/circuitcity .
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