PBGC Assumes Pension Plan of Furniture Retailer Levitz
FOR IMMEDIATE RELEASE
October 03, 2006
WASHINGTON-The Pension Benefit Guaranty Corporation (PBGC) today announced it has assumed responsibility for the Levitz Furniture Corp. Employees' Retirement Plan sponsored by bankrupt furniture retailer Levitz Home Furnishing Inc., Woodbury, N.Y. The plan covers over 1,600 participants and has been frozen since 1996.
The PBGC stepped in because the pension plan faced abandonment after Levitz, in liquidation, sold substantially all of its assets to Prentice Capital Management LP in a transaction that did not include the pension plan. Retirees will continue to receive their monthly benefit checks without interruption, and other workers will receive their pensions when they are eligible to retire.
The Levitz Furniture Corp. Employees' Retirement Plan is 70 percent funded, with $55.5 million in assets to cover $79 million in promised benefits, according to PBGC estimates. The agency expects to be liable for the entire $23.5 million shortfall. Assumption of the plan will have no material effect on the PBGC's balance sheet. The pension plan terminated as of December 16, 2005, and PBGC became trustee on October 2, 2006.
Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminated in 2005 is $45,613 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.
Levitz retirees who draw a benefit from the PBGC may be eligible for the federal Health Coverage Tax Credit. Further information may be found on the PBGC Web site at http://www.pbgc.gov/workers-retirees/benefits-information/content/page13692.html.
Within the next several weeks, the PBGC will send trusteeship notification letters to all plan participants. Workers and retirees with questions may consult the PBGC Web site, www.pbgc.gov or call toll-free at 1-800-400-7242. TTY/TDD users should call the federal relay service by dialing 1-800-877-8339 and asking for 800-400-7242.
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 30,000 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. 07-01