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News & Policy

PBGC to Protect Retirement Benefits of 8,000 Former Bradlees Workers

May 14, 2001

The Pension Benefit Guaranty Corporation (PBGC) today announced it is taking over the underfunded pension plan of bankrupt Bradlees Stores, Inc., Braintree, Mass., which operated 105 discount department stores primarily in the northeastern U.S.

"PBGC is acting because the pension plan is underfunded by about $12 million and the company is liquidating. As a result of PBGC's action, the retirement benefits of more than 8,000 Bradlees workers and retirees are protected. And we will make sure that those already retired will continue to receive their checks without interruption," said Acting PBGC Executive Director John Seal.

Bradlees filed for bankruptcy on December 26, 2000. The company's pension plan has assets of about $83 million to cover benefit liabilities totaling around $95 million, according to PBGC estimates.

Almost all workers and retirees will receive the same benefits from PBGC they are now receiving or would be entitled to receive under the Bradlees plan, which terminated as of April 30, 2001. The maximum pension guaranteed for workers in plans that terminate in 2001 is $3,392.05 a month (or $40,704.60 a year) for persons retiring 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 Bradlees.

PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by more than 43 million American workers and retirees participating in private-sector defined benefit pension plans. PBGC insures nearly 38,000 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. 01-28