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Questions and Answers for Participants in the Sears Holdings Corporation Pension Plans

Last updated on May 07, 2019

On February 11, 2019, the Pension Benefit Guaranty Corporation took responsibility as trustee for Sears Holdings Corporation’s two defined benefit pension plans. PBGC and Sears Holdings agreed to end the plans as of January 31, 2019. Together the two plans cover about 90,000 workers and retirees of Sears, Roebuck and Co. and Kmart Corporation. PBGC offers the following information to Sears Holdings participants.

This page will be updated as events occur and as more information becomes available.

PBGC is a federal agency created by the Employee Retirement Income Security Act of 1974 (ERISA) to protect pension benefits in private sector defined benefit plans - the kind that typically pay a set monthly amount at retirement. If your pension plan is insured by PBGC and it ends without sufficient money to pay all benefits, PBGC's insurance program will pay you the benefit provided by your pension plan up to the limits set by law.

PBGC receives no taxpayer dollars. Its operations are financed by insurance premiums, investment income and assets and recoveries from failed single-employer plans. 

Yes – PBGC insures the two Sears Holdings defined benefit pension plans.  The two plans are:

Sears Holdings Pension Plan 1
Sears Holdings Pension Plan 2

Together, those 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.

Sears and Kmart workers and retirees with questions about their benefits should contact:

Sears Holdings Pension Service Center

By telephone:
1-800-953-5390 for questions about Sears Holdings pension benefits

Customer Service is available Monday through Friday 8:00 a.m. to 6:00 p.m., Central Time, except New York Stock Exchange (NYSE) holidays.

By mail:
Sears Holdings Pension Service Center
PO BOX 981909
El Paso, TX 79998

When an underfunded pension plan is terminated and transferred to PBGC, we 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.

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 follows rules regarding whether employees can begin their pension benefits while working – called the working retirement rules. This guidance explains how the rules apply to Sears Holdings participants.

  • If I have reached Normal Retirement Age (65), can I begin my retirement benefits?

    Yes – When you reach age 65, you may start your benefits while you are working, regardless of whom you are working for.

  • I am under age 65, but will be working for one of the Transform entities under Transform Holdco. Can I begin my retirement benefits?

    Yes – if you are eligible for early retirement, you may begin your benefits once you move to one of the Transform entities under Transform Holdco.

  • I am under age 65 and working for another company related to Sears Holdings. May I begin my retirement benefits?

    Maybe – PBGC has not completed the analysis of other companies related to Sears Holdings. We will update this site when the analysis is complete.


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.


Last Updated: August 30, 2021