PBGC Will Guarantee Pensions for Over 1,600 HIP of New Jersey Workers
FOR IMMEDIATE RELEASE
February 15, 2000
The Pension Benefit Guaranty Corporation (PBGC) today announced it is taking over the pension plan of HIP of New Jersey, Inc. of North Brunswick, N.J., an insolvent health maintenance organization no longer in business.
"PBGC will now provide the pension benefits promised by HIP of New Jersey," said PBGC Executive Director David M. Strauss. "Because of the federal pension insurance program, virtually all HIP workers and retirees are expected to collect the benefits the plan provided."
The HIP Health Plan of New Jersey Staff Employees Retirement Plan and Trust will terminate with an effective date of April 9, 1999, when HIP of New Jersey ceased operations and began a court-ordered liquidation under the supervision of New Jersey insurance regulators. With assets of $13.6 million and liabilities of $22.5 million, the plan covers 1,622 people, of whom 22 are retired and collecting benefits which will continue uninterrupted.
The maximum pension benefit guaranteed for workers in plans that terminate in 1999 is $3,051.14 a month (or $36,613.68 a year) for persons who retire at age 65 or older. The guarantee is lower for those who retire early or have survivor's benefits.
Workers and retirees do not need to take any action. Anyone with questions about benefits or wishing to retire may contact PBGC's Customer Service Center toll-free at 1-800-400-7242. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to 800-400-7242.
PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 (ERISA) to guarantee payment of basic pension benefits earned by about 42 million American workers and retirees participating in more than 44,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and investment returns.
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PBGC No. 00-16