PBGC Begins Managing Benefits for Sears Holdings employees
If you are not currently receiving benefits, there is nothing for you to do at this time.
If you are currently receiving benefits:
- You will need to verify your personal information within 30 days of the date of the PBGC trusteeship letter you received. You can verify your information online via a MyPBA account or by returning the Payee Information Form you received with your Trusteeship Letter.
- If you do not complete the verification questions through MyPBA or send the completed Payee Information Form within 30 days of your trusteeship letter, your benefit payments may be suspended. We will notify you in writing prior to suspending your benefits.
- You should now contact PBGC’s Customer Contact Center for any customer service needs.
More information for Sears participants is available below.
On February 11, 2019, the Pension Benefit Guaranty Corporation took responsibility as trustee for Sears Holdings Corporation’s two defined benefit pension plans that cover workers and retirees of Sears, Roebuck and Co. and Kmart Corporation. PBGC and Sears Holdings agreed to end the plans as of January 31, 2019.
On December 1, 2021, PBGC transferred benefits administration activities for Sears Holdings payees from the Sears Holdings Pension Service Center to PBGC.
The QAs below discuss the following information:
All Sears Holdings participants who are receiving their pension benefits ("Sears Holdings payees") will be impacted by PBGC's assumption of benefit administration responsibilities for the Sears Holdings pension plans.
If you are in pay status: Beginning December 1, 2021, Sears Holdings payees should contact PBGC’s Customer Contact Center at 1-800-400-7242 to address customer service needs.
If you are not in pay status: PBGC expects to begin transitioning benefits administration for participants not yet receiving benefits (non-payees) in the spring of 2022.
Until notified, non-payees should call the Sears Holdings Pension Service Center at 1-800-953-5390 for customer service needs.
In November and December 2021, PBGC is sending trusteeship letters to Sears Holdings payees. The trusteeship letter explains the transition and includes instructions on how to provide PBGC with the information needed to continue payments.
- If you are a participant in a Sears Holdings Pension plan but are not yet receiving payments (a Sears Holdings non-payee), there is nothing to do at this time. The Sears Holdings Pension Service Center will continue to administer your benefits. PBGC will contact you when that changes. Please continue to call 1-800-953-5390 for questions or requests.
- If you are a Sears Holdings payee and you do not receive a trusteeship letter by January 15, 2022, please contact us.
If you are a Sears Holdings retiree or beneficiary currently receiving benefits, your December payment will not be affected. The change will apply in January 2022 when your first benefit payment will be made by PBGC.
As a Sears Holdings payee, you will continue to receive benefits with no disruption, although you will need to verify your information. (See the question: What do I need to do to ensure my payments continue, and how soon do I need to do it?).
The only change you’ll see is that beginning January 2022, your payments will come from PBGC’s paying agent, State Street Corporation. If you currently use direct deposit for your pension payments, State Street will deposit your pension payments into the same bank account. PBGC will continue to withhold federal income tax from your payments at your current rate.
It's important for you to know that PBGC does not withhold state and local taxes, medical and life insurance premiums, and other non-federal deductions. If you have any of these deductions, you will need to make other arrangements to pay them.
In order to continue paying your pension benefit, PBGC needs to make sure we have current information about you. PBGC needs to receive this information within 30 days of the date of your trusteeship letter. There are two ways you can verify your information:
- Online via MyPBA: The first step is to verify your identity via Login.gov’s identity authentication service to access your MyPBA account. Once you have successfully verified your identity through Login.gov and signed into MyPBA, you will be presented with a set of questions to verify information about yourself. Once you’ve confirmed or updated your information, you have completed the process of providing PBGC with your updated personal information to prevent a possible suspension of benefits.
There is nothing more for you to do to receive your January 2022 and future payments, on-time. Completing the verification questions allows you to not have to fill out the form included within your trusteeship letter package. There is no Payee Information Form in MyPBA for you to complete.
- Mail: If you are unable to use the online MyPBA service, you can mail your completed Payee Information Form, included with your trusteeship letter, to PBGC in the postage-paid envelope provided. You can also send the form via fax.
IMPORTANT: You must verify your information online via MyPBA or return the completed form to PBGC within 30 days of the date of your trusteeship letter.
If you do not complete the verification questions through MyPBA or send the completed Payee Information Form within 30 days of your trusteeship letter, your benefit payments may be suspended.
If you have questions, please contact us.
There will be no change in how you receive your 1099-R for 2021. State Street Corporation will provide your 1099-R for 2021 just as they have for prior years.
All 1099-Rs will be mailed by January 31, 2022. If you do not receive your 2021 1099-R by February 18, 2022, or need a corrected 1099 for 2021, please contact us.
Yes – all participants in the Sears Holdings Corporation Pension Plans are eligible to create an online MyPBA account.
In order to set up an online MyPBA account, you will need to complete an identity verification process through the Federal government’s Login.gov.
To start the MyPBA/Login.gov identity verification process, please visit PBGC’s MyPBA webpage. You will find FAQs and a video on the benefits of setting up a MyPBA account.
Once you’ve gathered all documentation you’ll need to verify your identity, click on the blue MyPBA Login button to get started.
Any updates you submit through MyPBA or PBGC’s Customer Contact Center will take effect starting with your first payment from PBGC.
With MyPBA, you can:
- Complete required forms
- Update your contact information
- Change your federal tax withholding
- Verify your PBGC income
To complete the identity verification with Login.gov, you will need: 1) a valid email address; 2) a phone number (mobile preferred); and 3) a current US-issued ID (driver’s license or state-issued ID card).
Note: Customers without US-issued IDs and those who are Guardians or have Power of Attorney for Sears retirees are not eligible to create MyPBA accounts at this time.
If you are a Sears Holdings payee:
Phone: Sears Holdings participants who are currently receiving their retirement benefits should call the PBGC directly at 1-800-400-7242. Customer Contact Center information and hours are available on the PBGC’s Contact Us website.
Mail: Pension Benefit Guaranty Corporation
P.O. Box 151750
Alexandria, VA 22315-1750
Please include your full name and customer ID or the last four digits of your Social Security number at the top of each document, along with your request. Please allow four to six weeks for PBGC to respond to your request.
If you are a Sears or Kmart participant non-payee:
Phone: Sears Holdings participants who are not yet receiving their benefits should continue to call 1-800-953-5390.
Mail: Sears Holdings Pension Service Center
P.O. Box 981909
El Paso, TX 79998
Yes. You may apply for your pension benefit as soon as you are eligible for retirement.
Yes – PBGC insures the two Sears Holdings defined benefit pension plans. The two plans are:
Together, these plans cover about 90,000 pension plan participants.
No. The Sears Holdings 401(k) Savings Plan is an individual account savings plan. PBGC’s insurance does not cover 401(k) plans.
No. The Sears Holdings pension plans remained ongoing and under the responsibility of Sears, until January 31, 2019. While underfunded pension plans often terminate during bankruptcy proceedings, a company’s bankruptcy filing by itself does not terminate a pension plan.
PBGC stepped in to become responsible for the company’s two pension plans because it was clear that Sears’ continuation of the plans was no longer possible. PBGC and Sears agreed, with bankruptcy court approval, to terminate the plans as of January 31, 2019.
When an underfunded pension plan is terminated and transferred to PBGC, the agency will notify plan participants and beneficiaries and provide information about their plan and about PBGC.
If you are already receiving a pension, your payments will continue without interruption in the annuity form you chose at retirement.
Important: If you are currently in pay, you will need to return the PBGC Payee Information Form that came with your PBGC trusteeship letter within 30 days to continue your benefits uninterrupted.
If you have not yet retired, your payments will begin when you become eligible and apply for pension benefits.
No. You cannot earn additional pension benefits under your plan after the date the plan terminates.
Note: The Sears Holdings plans were frozen for purposes of benefit accruals in 1996 for former Kmart participants and in 2005 for Sears participants.
Active participants could continue to earn service after the freeze date toward vesting and eligibility for early retirement and certain forms of payment.
However, on January 31, 2019, all service accrual ceased.
Furthermore, PBGC’s guarantees are based on service earned as of the date Sears entered into bankruptcy, October 15, 2018.
PBGC estimates that the two Sears Holdings pension plans are underfunded by $1.4 billion leaving them 64 percent funded. That is, the money in the pension plans is about $1.4 billion less than the value of future benefits payable by the plans to current and future retirees.
At this time, benefits paid from the Sears Holdings Corporation pension plans are estimates of the amounts payable by PBGC. However, PBGC's preliminary analysis shows that, for the majority of people covered under the Sears Holdings Corporation pension plans, the monthly plan benefit is fully guaranteed. Kmart “90-point” retirement benefits for service earned after Sears entered bankruptcy on October 15, 2018, may not be fully guaranteed.
Some pension plans offer their participants lump sum payments for the full value of their pensions, but PBGC generally does not. PBGC pays benefits in monthly payments for life. However, if the total value of your benefit payable by PBGC is $5,000 or less and you have not started receiving monthly payments, you can receive a lump sum from PBGC.
No. The termination of the pension plans does not affect purchased annuities. They will continue to be paid by the insurance company who is responsible for those benefits.