PBGC Protects Pension Plans at Niagara Falls Memorial Medical Center
FOR IMMEDIATE RELEASE
April 30, 2009
WASHINGTON-The Pension Benefit Guaranty Corporation (PBGC) today announced it has assumed responsibility for a pension plan covering more than 1,200 workers and retirees of Niagara Falls Memorial Medical Center, a healthcare provider in New York State.
The PBGC stepped in because the medical center missed about $7 million in legally required pension contributions. Niagara has not paid into the plan since September 2006, and lacks the assets to make past due or future payments. Additionally, Niagara's failure to make such payments left the plan non-compliant with minimum funding standards under the Internal Revenue Code.
According to PBGC estimates, the Retirement Plan of Niagara Falls Memorial Medical Center is about 54 percent funded, with assets of $9 million and benefit liabilities of $21 million. The agency expects to be responsible for about $7.6 million of the $11.8 million shortfall.
The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which ended on April 30, 2009. Assumption of the plan's unfunded liabilities will have no material effect on the PBGC's financial statements, 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.
Niagara Falls Memorial Medical Center is a 315-bed, non-profit hospital and nursing home in Niagara County, NY. The medical center provides care for a disproportionate number of the county's uninsured patients.
Within the next several weeks, the PBGC will send notification letters to all participants in the Niagara Falls Memorial Medical Center Pension Plan. Under provisions of the Pension Protection Act of 2006, the maximum guaranteed pension the PBGC can pay is determined by the legal limits in force on the day the plan ended. Therefore, participants in the pension plan are subject to the limits in effect on April 30, 2009, which set a maximum guaranteed amount of $54,000 for a 65-year-old.
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 medical center 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.
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.
— ### —
PBGC No. 09-22