PBGC Takes Rickel Home Centers Plans to Secure Pensions
FOR IMMEDIATE RELEASE
March 02, 1998
The Pension Benefit Guaranty Corporation (PBGC) today announced it is taking over two pension plans of Rickel Home Centers, Inc., to protect over 2,400 workers and retirees. PBGC is acting because the company, which operated nearly 100 home improvement and hardware stores primarily in Pennsylvania and New Jersey, is in bankruptcy liquidation and the plans are underfunded by about $6 million.
"Because of the federal pension insurance program, retirees can be confident that their pension benefits will continue without interruption and workers will receive benefits when they retire," said PBGC Executive Director David M. Strauss.
The company's Employees' Retirement Plan (formerly the Channel Plan) has assets of about $12 million to cover liabilities of some $16 million, and the Teamsters Plan has assets of about $1.4 million to cover liabilities of $3.4 million.
Rickel, headquartered in South Plainfield, N.J., filed for bankruptcy in January 1996 and in October 1997 began liquidation.
It is expected that PBGC's guarantee will provide most Rickel workers with their full benefit. The maximum pension guaranteed for workers in plans that terminate in 1997 is $2,761.36 a month (or approximately $33,136 a year) for persons retiring at age 65 or later. For plans that terminate in 1998, the maximum pension guaranteed is $2,880.68 a month (or approximately $34,568 a year) for persons retiring at age 65 or later. The maximum guarantees are lower for those who retire early or have survivor's benefits.
The PBGC will seek to have the Employees' Retirement Plan, which includes a few employees continuing to work in the liquidation process, terminated effective March 2, 1998. Rickel had frozen the accrual of benefits by workers in that plan on December 31, 1995. PBGC will seek to have the Teamsters Plan terminated effective October 31, 1997, because by that date all employees in the plan had ceased working and accruing benefits.
Workers and retirees do not need to take any action. Anyone with questions about benefits or wishing to retire may contact PBGC's Customer Service Center 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 to be connected to 800-400-7242.
PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by some 42 million American workers and retirees participating in about 50,000 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 investment returns.
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PBGC No. 98-13