For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.
Compliance July 17, 2007
PBGC Takes on Hardware and Building Supply Co's Plan
July 17, 2007 (PLANSPONSOR.com) - The nation's
private-sector pension insurer has seized the underfunded
pension plan covering nearly 900 former employees of
Scotty's Inc., a hardware and building supply chain based
in Winter Haven, Florida.
Reported by Adrien Martin
A news release from the Pension Benefit Guaranty Corporation (PBGC) said the agency took over the plan because Scotty’s left more than $1 million in required contributions to its pension plan unpaid, and the pension plan is slated to be abandoned after the hardware company’s bankruptcy liquidation.
Scotty’s plan is 55% funded, with some $8.3 million in assets to cover $15 million in benefit liabilities. The PBGC expects to be liable for entire $6.7 million shortfall.
The agency announcement said it will take over the assets and use PBGC insurance funds to pay guaranteed benefits earned under the plan, which terminated on June 27, 2005.The PBGC became trustee of the plan on June 20, 2007.
Scotty’s filed for Chapter 11 protection in the U.S. Bankruptcy Court in Wilmington, Delaware on September 10, 2004. The case was converted to a Chapter 7 liquidation on June 27, 2005.
Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2005 is $45,614 per year.