Get more! Sign up for PLANSPONSOR newsletters.
Compliance December 31, 2007
PBGC Asks Court to Terminate Racing Association Pension Plans
December 31, 2007 (PLANSPONSOR.com) - The Pension
Benefit Guaranty Corporation (PBGC) announced it has
initiated court action to protect the benefits of more than
1,700 workers and retirees covered by the pension plans of
the New York Racing Association Inc. (NYRA), a nonprofit
corporation that operates the Aqueduct, Belmont, and Saratoga
racetracks under a New York state franchise.
Reported by Rebecca Moore
According to the announcement, the franchise is set to expire on December 31, 2007. In a September filing with the bankruptcy court, the PBGC objected to the NYRA’s plan of reorganization because it fails to adequately fund and protect the association’s pension plans.
The PBGC said it filed papers to seek approval from the U.S. District Court in Brooklyn to end five pension plans sponsored by the NYRA. In its filing, the agency cited NYRA’s failure to comply with pension funding laws, the pension plans’ inability to pay benefits if the franchise expires, and the increased financial risk to the PBGC if the agency delayed taking action.
Collectively, NYRA’s five pension plans are 66% funded, the announcement said. PBGC estimates the plans have $137.3 million in assets to cover about $208.8 million in benefit promises. If the PBGC becomes statutory trustee of the plans, it expects to be responsible for $59.7 million of the $71.5 million shortfall.
The agency said it will send notification letters to all plan participants when it assumes responsibility for the plans.