PBGC Takes Over Chicago Social Service Agency Pension

January 28, 2009 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) has assumed responsibility for the pensions of more than 500 employees and retirees of the Jane Addams Hull House Association in Chicago, according to a PBGC announcement.

The private-sector pension insurer said it stepped in to become trustee of the Hull House Association Pension Plan after deciding that the non-profit community service organization would not be able to come up with enough money from operations or financing to cover accumulated pension funding deficiencies, pay its debts, and to continue operating.

The PBGC estimated the plan has $6.3 million in assets to cover benefit liabilities totaling $11.1 million. The agency expects to cover nearly all of the $4.8 million funding shortfall.   

The pension plan terminated as of March14, 2008, the date Hull House proposed in its application for distress termination, and the PBGC became trustee on November 20, 2008.

Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminated in 2008 is $51,750 per year.

Hull House, with origins tracing to a settlement house founded in 1889, operates a variety of community service programs at about 40 sites in metropolitan Chicago, serving some 60,000 low-income individuals and families.