Were you collecting or planning to collect a pension from Pemco World Air Services Inc.? If so, we've got news for you.
As of Wednesday, October 3, 2012, PBGC became the trustee of the Pemco World Air Services Inc. Pension Plan, which has some 1,252 participants, including 380 retirees.
Headquartered in Tampa, Florida, Pemco primarily provided aircraft maintenance, repair and overhaul services to commercial air carriers.
The company filed for bankruptcy on March 5, 2012 and the bankruptcy court approved the sale of their assets on August 9, 2012.
PBGC will pay all pension benefits earned by the company's retirees up to the legal limit of $56,000 a year for a 65-year-old.
Participants with questions about their pension benefits should contact PBGC Customer Service at 1-800-400-PBGC (7242).
One big job for PBGC is to make sure that companies with pension plans finance those plans and PBGC's safety net. The best outcome is always for a company to keep its own pension plans. But when it can't, we also fight in court to recover the money that the company owes for its pensions.
A recent case involved the Daytona Beach, Fla. News-Journal, a newspaper in receivership – meaning that a court ordered the sale of the paper. The business owed PBGC $15 million for pension benefits that the newspaper owed its employees but that PBGC is now paying.
But in court, another creditor made a claim for an amount greater than the value of the entire business, based on its former ownership of the company. A Florida court gave that claim priority – leaving PBGC and others out in the cold.
A PBGC staff attorney researched Florida law and found that the court had made an error. With that information PBGC successfully appealed the ruling. Florida law says that claims arising from debt get priority over claims arising from ownership. The appeal kept PBGC's claim alive and may yet enable PBGC to collect significant funds from the newspaper.
"The decision supports the general rule that debt comes before equity," said Chief Counsel Izzy Goldowitz, "so it's an important precedent."
Read the appeals court's full decision. [PDF]
In and around the hard-hit city of Detroit, PBGC is protecting the retirement of people making a difference. The agency has stepped in to protect the retirement income of the nearly 1,600 employees of United Way for Southeastern Michigan.
While the pension plan is ending, the not-for-profit United Way for Southeastern Michigan is not. So, workers there can continue the non-profit's mission to improve communities and individual lives with the confidence that their pensions are safe.
The pension plan had a shortfall of about $23 million, which PBGC will make up from its insurance funds. Retirees will get their full benefit, up to the limits set by Congress ($54,000 a year for a 65-year-old).
If you're a member of the pension plan you will get a letter from us soon with more information. In the meantime, see the United Way for Southeastern Michigan plan page for more information.
PBGC protects pensions. We also want to protect you!
Scams are at an all-time high during these tough economic times, and retirees are among scammers' favorite targets.
We have just learned that an individual attempted to obtain a 25% "finder's fee" for helping a retired United Airlines flight attendant get her PBGC pension benefit. He, as well as others, may be doing this with other UAL flight attendants.
Let's be clear: You do not need anyone's assistance to obtain your benefit from PBGC. People or firms who offer to help you for a finder's fee are not associated with PBGC. If you have questions, contact us by email or call our Customer Contact Center at 1-800-400-7242.
Read the full fraud alert from the Inspector General.