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Compliance June 17, 2009
PBGC Takes on Fortunoff Cash Balance Plan
June 17, 2009 (PLANSPONSOR.com) - The Pension
Benefit Guaranty Corporation (PBGC) announced it has assumed
responsibility for the cash balance pension plan covering
nearly 3,000 workers and retirees of the Fortunoff Fine
Jewelry & Silverware LLC and M. Fortunoff of Westbury LLC
units of Source Financing Corp., a retail holding company
based in Uniondale, New York.
Reported by Rebecca Moore
The PBGC said it stepped in because the underfunded plan faced abandonment after Source Financing, in chapter 11 bankruptcy, sold substantially all of its assets in a transaction that did not include the plan. According to the announcement, the PBGC estimates the Fortunoff, The Source, Cash Balance Plan is 54% funded, with assets of $45 million and benefit liabilities of $82 million.
The agency expects to cover the entire $37 million shortfall. The plan has been frozen since October 29, 2006.
The company’s Fortunoff subsidiaries were specialty retailers of jewelry, house wares, small appliances, gifts and luggage, with stores in New York, New Jersey, Connecticut and Pennsylvania.