PBGC Will Guarantee Pensions for 17,000 Grand Union Workers
FOR IMMEDIATE RELEASE
January 02, 2001
The Pension Benefit Guaranty Corporation (PBGC) today announced it is taking over the underfunded pension plan of The Grand Union Company, Wayne, N.J., a bankrupt grocery-store chain in liquidation.
"As a result of PBGC's action, benefits for almost 17,000 people covered by the Grand Union plan are protected," said PBGC Executive Director David M. Strauss. "For the more than 4,000 already retired, their monthly pension checks will continue without interruption. And the thousands of other workers who earned pensions under this plan can be sure of receiving them when they are eligible to retire."
The Grand Union Company Associates Retirement Plan had total assets of $183 million to cover total benefit liabilities of $205 million, according to PBGC estimates. The plan terminates as of January 1, 2001. The 17,000 plan participants include about 8,400 who worked for the now-defunct Colonial Stores chain that Grand Union purchased in 1980. The Colonial Stores and Grand Union pension plans merged in 1993. Other Grand Union workers participate in separate, ongoing multiemployer pension plans not affected by today's action.
Nearly all workers can expect to receive full benefits from PBGC. The maximum pension benefit guaranteed for workers in plans that terminate in 2001 is $3,392.05 a month (or $40,704.60 a year) for persons who retire at age 65. The amounts are adjusted for retirees at other ages or those who elect survivor 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's Web site, provides a link to further information on Grand Union.
In the bankruptcy liquidation, C&S Wholesale Grocers, Inc., Brattleboro, Vt., has agreed to purchase substantially all Grand Union assets including 185 stores and a distribution center in Montgomery, N.Y. Grand Union operated 197 stores in Connecticut, New Jersey, New York, Pennsylvania and Vermont. Colonial Stores had locations in Ohio, North and South Carolina, Georgia and Florida.
PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by about 43 million American workers and retirees participating in nearly 40,000 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. 01-16