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PBGC Protects Pensions at Pueblo International LLC

October 29, 2009

WASHINGTON-The Pension Benefit Guaranty Corp. (PBGC) today announced it has assumed responsibility for the underfunded pension plan covering more than 1,400 former workers and retirees of Pueblo International LLC, a retail holding company based in Pompano, Fla.

The PBGC stepped in because the plan failed to meet minimum funding requirements and faced abandonment because the company is liquidating all of its assets under bankruptcy proceedings, and there would be no entity left to finance or administer the plan.

Pueblo 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 Pueblo International LLC Employees' Retirement Plan is 29 percent funded, with assets of $6.2 million to cover $21.6 million in benefit liabilities, according to PBGC estimates. The agency expects to be responsible for the entire $15.4 million shortfall.

The plan ended on July 31, 2008. The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan.

Within the next several weeks, the PBGC will send notification letters to all participants in the 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 date of the plan sponsor's bankruptcy. Therefore, participants in the plan are subject to the limits in effect on Aug. 3, 2007, which set a maximum guaranteed amount of $49,500 a year for a 65-year-old. The agency became trustee of the plan on Oct. 13, 2009.

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.

Pueblo, a wholly-owned subsidiary of Nutritional Sourcing Corporation (NSC), was founded in 1955 in Pompano Beach and operated supermarkets and video rental stores in Puerto Rico and the U.S. Virgin Islands. NSC and its subsidiaries filed for Chapter 11 protection in the U.S. Bankruptcy Court in Wilmington, Del., on Aug. 3, 2007. The filing was spurred by the company's inability to service debt payments. NSC and its units are liquidating under Chapter 11.

Workers and retirees with questions may consult the PBGC Web site, 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.

Pueblo 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

Assumption of the plan's unfunded liabilities will have no significant effect on the PBGC's financial statements because an estimate of the claim was previously included in the agency's fiscal year 2008 financial statements, in accordance with generally accepted accounting principles.

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. 10-03