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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