PBGC to Pay Pension Benefits at Forum Health in Youngstown, Ohio
FOR IMMEDIATE RELEASE
February 28, 2011
Federal Pension Insurer Paid More Than $115 Million to Area Residents in 2010
WASHINGTON—The Pension Benefit Guaranty Corporation will pay the pensions of almost 7,000 workers and retirees of Forum Health, a hospital in Youngstown, Ohio.
PBGC, which safeguards the pensions of 44 million Americans, stepped in because the hospital has gone out of business.
“PBGC is America’s retirement safety net,” said Director Josh Gotbaum. “When companies fail, we keep their pensions going.”
Forum Health retirees will continue to receive their monthly benefit without interruption, and other workers will receive their pensions when they are eligible to retire. Within the next several weeks, PBGC will send notification letters to all participants in the Forum Health plan.
In general, PBGC will pay the benefit that a retiree would earn if they retired at age 65. However, there is a legal maximum, $54,000 per year for a 65-year-old, and lower for people who retire before age 65 or choose survivor benefits. In addition, certain early-retirement payments and recent benefit increases are generally not covered.
“The PBGC trusteeship is a very important protection for the future of these pensions,” said Congressman Tim Ryan (Ohio-17). “Retirement security is one of the fundamental concerns we all share throughout our lives, and I hope today’s announcement alleviates any uncertainty of the pension plan’s future for these retirees. I especially appreciate the cooperation of our local labor unions in working with hospital management to secure this agreement.”
In Ohio’s 17th Congressional District, where Forum Health is located, the PBGC paid more than $115 million in pension benefits to over 13,000 residents last year. The agency also expects to send checks to another 6,000 residents upon retirement age.
In total, PBGC contributed more than $550 million to Ohio’s economy through benefit payments during 2010.
If you have questions, go to 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.
Forum Health retirees who get their pension from the PBGC may be eligible for the federal Health Coverage Tax Credit. For more information, go the PBGC Web site at http://www.pbgc.gov/wr/benefits/hctc/hctc-faqs.html.
PBGC, which receives no taxpayer funds, will take over the pension plan assets and use insurance premiums to pay covered benefits. According to PBGC estimates, the pension plan has $228 million to cover $402 million in benefit promises. The agency expectsto pay $150 million of the $175 million shortfall.
PBGC’s action will not have a significant impact on the agency’s financial statements. PBGC included an estimate of the Forum Health benefit payments in its fiscal year 2010 financial statements, in keeping with generally accepted accounting principles.
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PBGC No. 11-25