Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.
PBGC, Health System Reach Agreement to Preserve Pensions
According to the announcement, the pension plan
faced abandonment following the sale of Wyoming
Valley’s assets to Community Health Systems Inc. of
Franklin, Tennessee – a transaction that did not include
the pension plan.
Under an agreement with the PBGC, $50 million in sale
proceeds will be used to shore up the pension plan.
Following the sale’s completion on May 1, a
significant portion of the $50 million will be
contributed to the plan. The remainder will be placed in
a trust on behalf of the plan until 2013, when the plan
sponsor is required to initiate a standard termination of
the pension plan if the sponsor can satisfy the
requirements for a standard termination at that time.
The agency explained that in a standard termination, the
plan sponsor opts to end a plan with assets sufficient to
pay all benefits earned by those enrolled. To achieve
this, the plan either buys annuities for participants and
beneficiaries from a private-sector insurance company
that provides annuities, or if the plan permits, pays the
benefits directly to participants as lump sums.
If there are not sufficient assets to fund a standard termination of the Wyoming Valley Health Care Pension Plan in 2013, then all remaining trust assets must be contributed to the plan, the announcement said.
“We have been monitoring the pressures facing medical care providers and have been actively working to help them find solutions to their plan funding difficulties (see Millard Responds to Committee Questions ),” said Vince Snowbarger, acting director of the PBGC, in the announcement. “The agency will continue to work with plan sponsors like Wyoming Valley to help keep their plans ongoing so current and retired employees can receive all the benefits they have earned.”
You Might Also Like:
Ohio Multiemployer Pension Fund Gets $31.6M PBGC Grant
New England Teamsters Gets Second Largest PBGC Grant Yet
Single and Multiemployer PBGC Funds Likely to Remain Solvent Through Projection Period
« Guilty Plea Expected from West Coast Placement Agent in Pension Probe