PBGC Protects Pensions of 11,000 Polaroid Employees
FOR IMMEDIATE RELEASE
September 12, 2002
The Pension Benefit Guaranty Corp. (PBGC) today announced it has assumed responsibility for the underfunded pension plan covering over 11,000 former employees of Polaroid Corp., Cambridge, Mass. The bankrupt maker of instant cameras, film and accessories, as well as other digital imaging products, has sold all of its operating assets to OEP Imaging Corp., an affiliate of Bank One Corp.'s One Equity Partners.
"PBGC is stepping in because Polaroid has sold its assets in bankruptcy and the purchaser will not assume the pension plan," said PBGC Executive Director Steven A. Kandarian. "Because of PBGC's guarantee, retirees will continue to receive their monthly checks up to federally guaranteed limits. Others who earned benefits under the Polaroid plan can start receiving monthly pension checks when they become eligible to retire."
PBGC estimates that the Polaroid Pension Plan, with assets of $657 million and benefit liabilities of $981 million, is underfunded by about $324 million. The plan was terminated effective July 31, 2002, the day Polaroid's asset sale to OEP Imaging was completed.
Under federal pension law, the maximum pension guaranteed for workers in plans that terminate in 2002 is $3,579 a month (or $42,954 a year) for persons retiring at age 65. Maximum guarantees are adjusted for retirees older or younger than age 65 and for those who choose survivor benefits. Temporary benefit supplements for early retirees and certain portions of recent benefit improvements are not covered by PBGC.
Workers and retirees do not need to take any action. Polaroid pension plan participants who have questions about benefits or who wish 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. Information about PBGC's pension insurance program also may be found at www.pbgc.gov.
PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974. It currently guarantees payment of basic pension benefits earned by about 44 million American workers and retirees participating in over 35,000 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 by PBGC's investment returns.
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PBGC No. 02-41