The New York City-based investment bank is liquidating under bankruptcy court protection and its plan would have been abandoned, the nation’s private-sector pension insurer said in a news release. The plan ended December 12, 2008, and the agency became trustee of the plan on June 17, 2009.
In December 2008, the PBGC said, the Lehman Brothers Holdings Inc. Retirement Plan had a shortfall of $115 million, with $800 million in assets to cover $915 million in benefit liabilities. The $115 million underfunding figure has been revised upward from previously announced estimates, which had been made before December asset information was available.
The bankruptcy court recently approved a settlement between the agency and Lehman for $127.6 million plus interest. Under the agreement, PBGC received $115 million for the funding shortfall, and $12 million for the company’s liabilities for termination premiums (see PBGC, Lehman Strike Deal on Pensions ).
Participants in the plan are subject to the limits in effect on September 15, 2008, the date Lehman filed for Chapter 11 protection in the U.S. Bankruptcy Court in Manhattan. The maximum guaranteed amount is $51,750 per year for a 65-year-old.
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