Compliance June 23, 2010

PBGC Takes on Supermarket Chain’s Pension Plans

June 23, 2010 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) has assumed responsibility for three underfunded pension plans covering over 3,700 former employees and retirees of bankrupt Penn Traffic Co.
Reported by

Together, the Penn Traffic Big Bear Retirement Plan, the Pension Plan for Bargaining Employees of Eastern Pennsylvania, and the Riverside Division of Penn Traffic Co. Bargaining Employees Pension Plan are 57% funded, with $74.3 million in assets and $130.1 million in benefit liabilities, according to PBGC estimates. The agency expects to cover $53.8 million of the $55.8 million shortfall, and will take over the assets and use insurance funds to pay guaranteed benefits earned under the plans, which terminated as of January 25, 2010.  

The PBGC became trustee of the plans on June 17, 2010.  

The PBGC said assumption of the plan’s unfunded liabilities will increase the its claims by $53.8 million and was not previously included in the agency’s fiscal year 2009 financial statements.  

The Syracuse, New York, company is parent to a chain of supermarkets in western New York, northern Pennsylvania, Vermont and New Hampshire operating under the trade names BiLo, P&C and Quality.  The agency said it stepped in because the pension plans face abandonment after Penn Traffic completes bankruptcy liquidation proceedings and no entity remains to finance or administer the plans.   

Tops Markets LLC, Williamsville, N.Y., purchased substantially all Penn Traffic assets but declined to assume the pension plans.  

 

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