PBGC Protects Pension Plans at GB Retailers and Gramex Retail
FOR IMMEDIATE RELEASE
January 08, 2010
WASHINGTON-The Pension Benefit Guaranty Corporation (PBGC) today announced it has assumed responsibility for two underfunded pension plans covering about 760 former workers and retirees of GB Retailers Inc. and Gramex Retail Stores Inc., wholly-owned subsidiaries of Value City Department Stores LLC, Columbus, Ohio.
The PBGC stepped in because the pension plans face abandonment as Value City is liquidating all of its assets under bankruptcy proceedings, and no entity will remain to finance and administer the plans. Retirees under the plans will continue to receive their monthly benefit checks without interruption, and other workers will receive their pensions when they are eligible to retire.
Together, the GB Stores Inc. 1982 Employees' Retirement Plan and the Gramex Retail Stores Inc. Retirement Plan are 63 percent funded, with assets of $7.4 million to cover $11.7 million in benefit liabilities, according to PBGC estimates. The agency expects to be responsible for the entire $4.3 million shortfall. The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plans which ended as of May 31, 2009. The Gramex plan had been frozen since March 1, 2000.
Within the next several weeks, the PBGC will send notification letters to all participants in the plans. Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2009 is $54,000 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 GB Retailers and Gramex Retail 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.
Assumption of the plans' 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 2009 financial statements, in accordance with generally accepted accounting principles.
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. 10-15