The Pension Benefit Guaranty Corporation will pay retirement benefits for more than 1,300 current and future retirees of the Menninger Foundation and its affiliates. The Topeka, Kan.-based organizations provided mental health services.
PBGC is moving to take responsibility for Menninger's pension plan because it doesn't meet minimum funding requirements and will be unable to pay benefits following the breakup of the foundation.
PBGC will pay all pension benefits earned by Menninger retirees up to the legal maximum of about $56,000 a year for a 65-year-old.
When PBGC takes responsibility for the pension plan it will send notification letters to its members. Until then, the plan will continue under Menninger's sponsorship.
Menninger retirees who draw a benefit from PBGC may be eligible for the federal Health Coverage Tax Credit.
In 2002, Menninger and its affiliates made an agreement with Baylor College of Medicine and The Methodist Hospital to create a new mental health clinic in Houston, Texas, also called The Menninger Clinic. The agreement didn't include the pension plan.
According to PBGC estimates, the plan is 33 percent funded with $32.5 million in assets to pay $97.4 million in benefits. The agency is expected to cover nearly all of the $64.9 million shortfall.