WASHINGTON — The Pension Benefit Guaranty Corporation will pay retirement benefits for more than 19,000 current and future retirees of Furniture Brands International Inc., a furniture manufacturer based in St. Louis, Mo.
PBGC is stepping in because the company plans to sell the majority of its assets in bankruptcy and the buyer isn't assuming the pension plan.
PBGC will pay all pension benefits earned by Furniture Brands retirees up to the legal maximum of about $57,500 a year for a 65-year-old.
Retirees will continue to get benefits without interruption, and future retirees can apply for benefits as soon as they are eligible.
Employees and retirees who are participants in pension plans that were rolled into the Furniture Brands plan will also continue to receive benefits from the company until PBGC assumes responsibility.
According to PBGC estimates, the Furniture Brands Retirement Plan is about 55 percent funded with about $337 million in assets to pay $609 million in benefits. The agency expects to cover $270 million of the $272 million shortfall.
PBGC can provide general information now and will be able to answer more detailed questions once the agency receives pension plan records. Participants in the company's plan will be notified by letter after the transfer occurs.
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Furniture Brands started in 1921 under the name International Shoe Co. and Interco Inc., and has manufacturing sites in North Carolina and Mississippi. On Sept. 9, 2013, the company and 18 affiliates sought Chapter 11 protection in the U.S. Bankruptcy Court in Wilmington, Del. In October, Furniture Brands announced an agreement to sell the majority of its assets to KPS Capital Partners. An auction is scheduled for Nov. 21 to secure the highest value for the company's assets.
PBGC protects the pension benefits of more than 42 million Americans in 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, investment income, and with assets and recoveries from failed plans. For more information, visit PBGC.gov.