The Pension Benefit Guaranty Corporation (PBGC) said it is assuming responsibility for the Fleming Companies Inc. Pension Plan, which ended as of January 1, 2004. The agency formally took the plan under its distress termination program effective Thursday.
The plan has a $374-million shortfall with about $270 million in assets and $644 million in liabilities, according to the PBGC, which takes over private pension plans from bankrupt or ailing companies. Of the total shortfall, the agency expects to be liable for about $358 million. Fleming and its subsidiaries also sponsor four other defined-benefit pension plans, which remain ongoing, the PBGC said.
In the case of Lewisville, Texas-based Fleming, the PBGC has determined that the company and its subsidiaries, including its Core-Mark convenience-store division, could not afford to maintain the pension plan.
Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2004 is $44,386 per year. Within the next several weeks, the PBGC will send trusteeship notification letters to all participants in the Fleming Companies plan. After the transfer of plan documents, the agency will review individual records and calculate each person’s benefit according to plan provisions, asset allocation rules, and federal guarantee limits.
Created under the Employee Retirement Income Security Act (ERISA), the PBGC currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 31,000 private-sector defined benefit pension plans.