PBGC Takes on a Pennsylvania Hospital Pension Plan

October 12, 2007 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) announced it has assumed responsibility for the pensions of about 1,700 current and former employees of Easton Hospital, an acute-care teaching hospital in Easton, Pennsylvania.

The PBGC said it stepped in because the plan was unable to pay benefits when due and would be abandoned following the sale of all the hospital’s assets. In October 2001, Easton Hospital sold its properties to Northampton Hospital Corp., a unit of Franklin, Tennessee-based CHS Community Health Systems, and the transaction did not include the pension plan, according to the announcement.

The PBGC estimates the Easton Hospital Employees’ Pension Plan, terminated on December 31, 2005, is 57% funded, with about $53 million in assets to cover some $93 million in benefit liabilities. The agency said it expects to be responsible for the entire $40 million shortfall.

Within the next several weeks, the PBGC will send notification letters to all plan participants. Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminated in 2005 is $45,614 per year.

Workers and retirees with questions may consult the PBGC Web site, www.pbgc.gov or call 800-400-7242.

Retirees of Easton Hospital who draw a benefit from the PBGC may also be eligible for the federal Health Coverage Tax Credit.  Further information may be found on the PBGC Web site at http://www.pbgc.gov/workers-retirees/benefits-information/content/page13692.html .