PBGC, Roundy's Supermarkets Reach $17.5 Million Agreement to Shore Up Pension Plan
FOR IMMEDIATE RELEASE
May 03, 2010
WASHINGTON-The Pension Benefit Guaranty Corporation (PBGC) today announced a $17.5 million agreement to bolster the funding of the pension plan of Roundy's Supermarkets Inc. Headquartered in Milwaukee, Roundy's owns and operates 154 grocery stores in Wisconsin, Minnesota, and Illinois under the trade names Pick 'n Save, Copps, Rainbow and Metro Market. Its pension plan covers 5,340 workers and retirees.
Under the agreement, the company immediately will put $7.5 million into the Roundy's Supermarkets Inc. Retirement Plan. That distribution will be followed by a $5 million payment on April 29, 2011 and $2.5 million on April 29, 2012. Roundy's will put the $15 million into the plan on top of the plan's required minimum funding contributions.
Roundy's also agrees to increase a $10 million letter of credit, obtained by the PBGC in 2005, by $2.5 to $12.5 million. The letter of credit was issued in November 2005 in connection with a $35 million settlement with the agency.
This transaction was identified under the PBGC's Early Warning Program, which monitors companies with underfunded pension plans and identifies corporate transactions that could jeopardize pensions. The agency then works with companies to arrange suitable protections for those pensions and the pension insurance program.
The PBGC and Roundy's began negotiations after the agency learned that Roundy's sought to acquire $150 million in new secured debt in order to pay a dividend to its owners.
"We appreciate working with Roundy's management to obtain this agreement," said PBGC Acting Director Vince Snowbarger. "The outcome is a good one for Roundy's workers and retirees. As always, we encourage companies considering similar transactions to come talk to us about protecting their workers' pension benefits."
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. 10-31