PBGC will pay retirement benefits for more than 1,400 current and future retirees of Interfaith Medical Center, which operates a 287-bed hospital in Brooklyn, N.Y.
The agency stepped in because Interfaith Medical is unable to meet the minimum funding requirements for the two pension plans it sponsors.
PBGC will pay all pension benefits earned by Interfaith Medical's retirees up to the legal limit of about $55,840 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.
Interfaith Medical sponsors the Health Services Retirement Plan and the Interfaith Medical Center Nurses Pension Plan. According to PBGC estimates, collectively the plans are 64 percent funded with about $108 million in assets to pay $176 million in benefits. The agency expects to cover $60 million of the $68 million shortfall.
The plans ended on May 22, 2014.
In addition to the hospital, Interfaith Medical also operates eight clinics that serve Bedford-Stuyvesant, Crown Heights, and other Brooklyn communities. Faced with continuing losses, on Dec. 2, 2012, the medical center sought Chapter 11 protection in the U.S. Bankruptcy Court in Brooklyn. The State of New York has provided financial support during the medical center's bankruptcy case; however, these funds didn't support the pension plans. To date, the missed minimum funding contributions total about $13 million.
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