PBGC Assumes Hull House Association Pension Plan
FOR IMMEDIATE RELEASE
January 28, 2009
WASHINGTON-The Pension Benefit Guaranty Corporation (PBGC) today announced it has assumed responsibility for the pensions of more than 500 employees and retirees of the Jane Addams Hull House Association in Chicago.
After determining that the non-profit community service organization would be unable to generate enough funds from operations or financing to cover accumulated pension funding deficiencies, pay its debts and remain in business, the PBGC stepped in to become trustee of the Hull House Association Pension Plan.
According to PBGC estimates, the pension plan has $6.3 million in assets to cover benefit liabilities totaling $11.1 million. The agency expects to cover nearly all of the $4.8 million funding shortfall. Assumption of the plan's unfunded liabilities will have no material effect on the PBGC's financial statement according to generally accepted accounting principles.
Retirees and beneficiaries will continue to receive their monthly benefit checks without interruption, and other participants will receive their pensions when they are eligible to retire. The pension plan terminated as of Mar.14, 2008, the date Hull House proposed in its application for distress termination, and the PBGC became trustee on Nov. 20, 2008.
The PBGC has sent notification letters to all plan participants. Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminated in 2008 is $51,750 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.
Workers and retirees with questions may consult the PBGC Web site, www.pbgc.gov or call 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.
Retirees of the Jane Addams Hull House Association 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.
Hull House, with origins tracing to a settlement house founded in 1889, operates a variety of community service programs at about 40 sites in metropolitan Chicago serving some 60,000 low-income individuals and families.
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 29,000 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. 09-13