WASHINGTON—The Pension Benefit Guaranty Corporation released the following statement today marking the recent emergence of the Great Atlantic & Pacific Tea Co. Inc. (A&P) from bankruptcy reorganization with its three single-employer pension plans intact:
"While A&P continues to face business challenges, we want to acknowledge their ongoing commitment to maintain these pensions," said J. Jioni Palmer, Director of Communications and Senior Advisor. “Bankruptcy forces tough choices, but plenty of companies go through it and keep their plans.”
A&P emerged from Chapter 11 protection on March 13, 2012. During the bankruptcy, PBGC sat on the unsecured creditors committee and worked closely with A&P to find ways that the company could avoid termination of these pension plans covering more than 26,000 A&P workers and retirees. On exit from bankruptcy, A&P also made up minimum funding contributions it had missed during the bankruptcy, further strengthening the plans.
“A&P shows that companies in bankruptcy can work with PBGC to find ways to keep their pension promises as they reorganize,” Palmer said.
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.