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PBGC Blog: Retirement Matters

Kodak logo

Last week, there was a Kodak moment that all of the company's employees and retirees could be proud of.

On Tuesday, Eastman Kodak Co., known for its iconic film business, ended a 20 month bankruptcy proceeding with its two pension plans intact. That means the nearly 63,000 people covered by those plans will have a more secure retirement.

When companies seek bankruptcy protection it doesn't automatically mean that plans will be shut down and come to us. During Kodak's bankruptcy, we were on the unsecured creditors committee and we worked with them to ensure the plans would continue.

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Allied Systems Holdings Inc. logoPBGC will pay retirement benefits for more than 650 current and future retirees of Allied Systems Holdings Inc., a vehicle transportation business based in Atlanta, Ga.

The agency stepped in because Allied Systems is selling the majority of its assets in bankruptcy proceedings and potential buyers haven't agreed to continue the company's three single-employer pension plans.

PBGC will pay all pension benefits earned by Allied Systems retirees up to the legal limit of about $57,500 for a 65-year-old.

Retirees will continue to get benefits without interruption, and future retirees can apply for benefits as soon as they are eligible.

According to PBGC estimates, Allied Systems plans are collectively 58 percent funded with $45 million in assets to pay $78 million in benefits. The agency expects to cover the entire $33 million shortfall.

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Informational graphic with silhouette of call center representative on the right. The graph describes the responsibilities of the 70 team members mentioned in the article and the call volume received over the past two years, also mentioned in the article.

When retirees and workers wish to contact PBGC, they first turn to the Customer Contact Center, which does its best to answer every call.

The center is nestled in Kingstowne, Va., outside of the hustle and bustle of Washington. Its representatives are the agency's first responders, making sure no call goes unanswered.

The team of 70 comprised of two federal managers, 13 contact center leadership team members, and 55 customer service representatives, regularly communicate with the Corporation's Field Benefit Administrators (FBA), transferring participants' calls to the FBAs to ensure questions on benefit entitlement are answered. The center also transfers calls to the Corporation's lawyers when participants have inquiries regarding legal matters.

The number of calls received fluctuates each month. From 2010 to 2012, the center received an average of 521,000 calls yearly or about 2,000 every business day.

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PBGC will pay benefits for nearly 470 current and future retirees of Butzel Long, a law firm based in Detroit, Mich.

The agency stepped in because the firm would be unable to maintain its pension plan and remain in business.

PBGC will pay all pension benefits earned by the law firm's retirees up to the legal limit of almost $57,500 a year for a 65-year-old.

Retirees will continue to get benefits without interruption, and future retirees can apply for benefits as soon as they are eligible.

Recent media reports have suggested that Butzel Long's plan was short by at least $10 million, but that estimate assumed the plan was ongoing. At PBGC, we measure funding on a termination basis, which often reveals a much higher shortfall.

According to our estimates, as of March 20, 2013 (the plan termination date), the pension plan was 47 percent funded with $34 million in assets to pay $73 million in benefits. The agency expects to cover most of the $39 million shortfall.

PBGC can provide general information now and will be able to answer more detailed questions once we receive the pension plan's records. Participants in Butzel Long's plan will be notified by letter after the transfer occurs.

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PBGC will pay benefits for 27 current and future retirees of Wrightco Technologies Inc., a for-profit educational center located in Ebensburg, Pa.

The agency stepped in because Wrightco's pension plan is unable to pay retirement benefits.

PBGC will pay all pension benefits earned by the company's retirees up to the legal limit of almost $56,000 a year for a 65-year-old.

The Wrightco Technologies Inc. Cash Balance Plan will end as of June 28, 2013.

Retirees will continue to get benefits without interruption, and future retirees can apply for benefits as soon as they are eligible.

PBGC can provide general information now and will be able to answer more detailed questions once we receive the pension plan's records. Participants in Wrightco's plan will be notified by letter after the transfer occurs.

For additional information, please email us at mypension@pbgc.gov or call 1-800-400-7242 (8 a.m. to 7 p.m. EST, Monday - Friday) (TTY/ASCII: call 1-800-877-8339 and ask to be connected to 1-800-400-7242).

Wrightco was founded in 1989 and provides high-tech training in areas such as fiber optics and data communications. After several years of poor financial performance, the company sought Chapter 11 protection in the U.S. Bankruptcy Court in Johnstown, Pa., on July 18, 2012.

PBGC will pay retirement benefits for nearly 750 current and future retirees of Landmark Medical Center, which operates a 214-bed hospital in Woonsocket, R.I.

The agency stepped in because the medical center can't pay benefits, and the pension plan will be abandoned after Landmark sells all of its assets.

PBGC will pay all pension benefits earned by the hospital's retirees up to the legal limit of almost $51,750 a year for a 65-year-old.

Retirees will continue to get benefits without interruption, and future retirees can apply for benefits as soon as they are eligible.

According to PBGC estimates, as of June 7, 2013 (the plan termination date), the pension plan was about 40 percent funded with $23 million in assets to pay $58 million in benefits. The agency expects to cover $25 million of the $35 million shortfall.

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