PBGC To Absorb NY Hospital's $29M Pension Shortfall

July 6, 2006 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation said Wednesday it will take over $29 million deficit of a New York hospital's defined benefit plan, after it missed nearly $8 million in required contributions.

According to a release, the Brooklyn, New York-based Victory Memorial Hospital Pension Plan covers about 1,200 current and former employees and retirees and has been frozen since 1997.

The nation’s private sector insurer found that the plan would not be able to make payments because it was only 42% funded, with about $20 million in assets to cover nearly $49 million in promised benefits to its participants. The hospital’s last contribution was for the 2003 plan year, the release said.

The PBGC will pay monthly pension benefits to the plan participants.

According to the release, absorbing the plan will not have a material affect on the PBGC’s balance sheet because an estimate of the liability was included in the fiscal 2005 financial statements. The pension plan terminated as of September 15, 2005, and PBGC became trustee on June 15, 2006.

Victory Memorial Hospital retirees who draw a benefit from the PBGC may be eligible for the federal Health Coverage Tax Credit. Further information may be found on the PBGC Web site at