Some 1,300 workers at a bankrupt Greenwich, Conn.-based newsprint company will receive future benefits through the Pension Benefit Guarantee Corporation, according to an announcement Tuesday.
Current and future retirees of SP Newsprint Co., LLC, will receive up to $54,000 per year, the maximum amount for a 65-year-old, thanks to an agreement signed with the federal pension organization.
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, the plans are collectively 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.
When PBGC takes responsibility for the plans, it will send notification letters to members. At that point, the company's retirees may also be eligible for the federal Health Coverage Tax Credit.