PBGC Takes Hospital Workers Pension Plan

December 16, 2002 (PLANSPONSOR.com) - The federal pension insurer has taken over the underfunded pension plan for a group of Washington, D.C hospital workers, the agency announced.

The Pension Benefit Guaranty Corp. (PBGC) said it has assumed responsibility for the plan covering 1,004 workers and retirees of Columbia Hospital for Women of Washington, D.C., which it says is underfunded by $8.6 million.

According to PBGC estimates, the plan, which terminated in May 2002, has $10.5 million in assets and $19.1 million in liabilities.

Under federal pension law, the maximum pension guaranteed for workers in plans that terminated in 2002 is $3,579 a month (or $42,954 a year) for workers retiring at age 65.  Maximum guarantees are adjusted for retirees older or younger than age 65 and for those who choose survivor benefits.

The PBGC, a federal corporation created by ERISA, currently guarantees payment of basic pension benefits for about 44 million American workers and retirees participating in over 35,000 private-sector defined benefit pension plans.

The agency is funded by insurance premiums paid by covered pension plans and by investment returns.