Sears filed for Chapter 11 bankruptcy protection, but it is unclear if the company will seek to have the two plans terminated, in which case PBGC would take control of the plans' assets. (Photo: iStock)
Most of the roughly 90,000 participants in Sears Holding Corporation's two frozen defined benefit plans would not see their monthly benefits reduced if the plans are terminated as part of bankruptcy proceedings, according to the Pension Benefit Guaranty Corp.
On Monday, Sears filed for Chapter 11 bankruptcy protection, but it is unclear if the company will seek to have the two plans terminated, in which case PBGC would take control of the plans' assets. The plans are underfunded by about $1.5 billion.
“The Sears Holdings Corporation pension plans are ongoing and under the responsibility of the company. However, a preliminary analysis shows that for the vast majority of people covered under the Sears Holdings Corporation pension plans the monthly plan benefit is fully guaranteed,” according to a statement on PBGC's website.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
