PBGC to Protect Benefits of 3,000 Former Ernst Home Center Workers
FOR IMMEDIATE RELEASE
July 23, 1998
The Pension Benefit Guaranty Corporation (PBGC) today announced it has taken over the pensions of Ernst Home Center, Inc. PBGC is acting because the Seattle-based firm, which operated about 80 home improvement and hardware stores primarily in the Pacific Northwest, is in bankruptcy liquidation and the pensions are underfunded by approximately $6 million.
"Nearly 3,000 Ernst Home Center workers and retirees will receive pensions when they retire because their pension plan was insured by the PBGC," said David M. Strauss, PBGC Executive Director. "And for about 200 former Ernst workers already retired, PBGC is assuming payment of their monthly benefits."
The Ernst Home Center, Inc. Employees Retirement Trust has assets of about $12 million to cover liabilities of around $18 million. Ernst filed for bankruptcy in July 1996 and began liquidation in November 1996. The plan was terminated as of May 2, 1997, the date specified by the company in a letter to participants telling of its intent to end the plan. The PBGC will also be paying benefits to about 30 former employees of Infotech Corp., a small firm no longer in business that formerly provided computer services to Ernst.
PBGC estimates that nearly all workers and retirees will receive full benefits. A few could receive lower benefits as PBGC does not guarantee early retirement supplements and other temporary benefits, or provide retirement benefits in excess of guarantees set by law.
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. The guarantee is lower for those who retire early or have survivor's 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 45,000 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.
— ### —
PBGC No. 98-37