PBGC Protects Pensions at Sound Shore Medical Center
FOR IMMEDIATE RELEASE
April 13, 2004
The Pension Benefit Guaranty Corporation today announced that it has assumed responsibility for the pensions of more than 1,300 employees and retirees of Sound Shore Medical Center of Westchester, a not-for-profit hospital in New Rochelle, N.Y.
"The PBGC is stepping in because Sound Shore Medical Center has missed more than $22 million in contributions to its pension plan, which is only 33 percent funded," said Acting Executive Director Vince Snowbarger. "Retirees will continue to receive their monthly benefit checks without interruption, up to guaranteed federal limits, and other employees will receive benefits when they are eligible to retire."
The Cash Balance Retirement Plan of Sound Shore Medical Center of Westchester is underfunded by $38 million, with $19 million in assets to cover $57 million in benefit promises. The PBGC estimates that almost all benefits accrued by workers in the plan are covered by the agency's insurance guarantees. The pension plan ended as of December 31, 2003.
Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2003 is $43,977 per year. The maximum guaranteed amount is lower for those who retire earlier or elect survivor benefits. In addition, certain early retirement subsidies and benefit increases made within the past five years may not be fully guaranteed.
Within the next several weeks, the PBGC will send notification letters to all participants in the Sound Shore Medical Center pension plan. After the transfer of plan documents, the agency will review individual records and calculate each person's benefit according to plan provisions, asset allocation rules, and federal guarantee limits. Workers and retirees with questions may contact PBGC 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 for 800-400-7242. General information about PBGC's pension insurance program is available at www.pbgc.gov.
The 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 44 million American workers and retirees participating in over 31,000 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 investment returns.
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PBGC No. 04-36