WASHINGTON—Now that Harry & David Holdings Inc. is moving forward to terminate its pension plan, the Pension Benefit Guaranty Corporation will keep its commitment to pay the pension benefits of the company's more than 2,700 workers and retirees.
"PBGC protects pensions and our top priority is to preserve pension plans," said PBGC Director Josh Gotbaum. "Although the court ruled against Harry & David's pensioners, the PBGC safety net will be there for them."
Throughout Harry & David's bankruptcy, PBGC fought to keep the pension plan going. Unfortunately, the bankruptcy court did not agree. The agency will not appeal the decision.
"We did our best to work with Harry & David to maintain their plan, but that didn't happen," said Gotbaum. "PBGC will step in and pay benefits, on time and without missing a beat."
Under an agreement reached Thursday, Harry & David will pay PBGC $3.6 million over two years. In addition, it will also pay $9.6 million in termination premiums over three years.
Harry and David's pension plan remains under the company's control until the plan termination process is complete. PBGC expects to take over the pension plan in the next several weeks.
The PBGC protects the pension benefits of 44 million Americans in 27,500 private-sector pension plans. The agency is directly responsible for paying the benefits of more than 1.5 million people in failed pension plans. PBGC receives no taxpayer dollars and never has. Its operations are financed by insurance premiums and with assets and recoveries from failed plans.