WASHINGTON— The Pension Benefit Guaranty Corporation will pay retirement benefits for nearly 1,300 current and future retirees of SP Newsprint Co., LLC, a newsprint producer based in Greenwich, Conn.
The PBGC, which safeguards the pensions of 44 million Americans, is moving to take responsibility for SP Newsprint's two pension plans because the company intends to sell its assets in bankruptcy proceedings and the buyers are not assuming the pension plans.
PBGC will pay all pension benefits earned by SP Newsprint retirees up to the legal maximum of $54,000 a year for a 65-year-old.
When PBGC takes responsibility for the pension plans it will send notification letters to their members. Until then, the plans will continue under company sponsorship.
Workers and retirees with questions may consult the PBGC Website, www.pbgc.gov or call toll-free at 1-800-400-7242. For TTY/ASCII (American Standard Code for Information Interchange) users, call the federal relay service toll-free at 1-800-877-8339 and ask for 800-400-7242.
SP Newsprint retirees who draw a benefit from PBGC may be eligible for the federal Health Coverage Tax Credit. Further information may be found on the PBGC website at http://www.pbgc.gov/wr/benefits/hctc/hctc-faqs.html.
SP Newsprint and its affiliates filed for Chapter 11 protection in the U.S. Bankruptcy Court in Wilmington, Del., on Nov. 15, 2011. The filing was spurred by a decline in demand for newsprint products. The company's two pension plans are: the SP Newsprint Co. Pension Plan and the SP Newsprint Co. Union Pension Plan.
According to PBGC estimates, collectively the plans are 49 percent funded with $74.4 million in assets to cover $150.7 million in benefits. The agency expects to cover $73 million of the $76.3 million shortfall.