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FOR IMMEDIATE RELEASE
June 11, 1999
CONTACT: Judith Welles, Director, Communications & Public Affairs
or Gary Pastorius, Public Affairs Officer (202) 326-4040
PBGC to Protect Retirement Benefits of Former Caldor Workers
The Pension Benefit Guaranty Corporation (PBGC) today announced it will take over the underfunded pensions of Caldor Corporation, Norwalk, Conn., which operated 145 discount department stores primarily in the northeastern U.S.
"PBGC is acting because the pensions are underfunded by about $10 million and the company is liquidating. As a result of PBGC's action, the retirement benefits of more than 11,000 Caldor workers and retirees are protected. And we will make sure that those already retired will continue to receive their checks without interruption," said PBGC Executive Director David M. Strauss.
Caldor filed for bankruptcy in September 1995 and began liquidation in January 1999. The firm sponsored two pension plans that had total assets of about $25 million to cover approximately $35 million in liabilities. PBGC estimates that virtually all workers and retirees will receive the same benefits they are now receiving or would be entitled to receive under the plans, which will be terminated effective June 11, 1999. The maximum pension guaranteed for workers in plans that terminated in 1999 is $3,051.14 a month (or $36,613.68 a year) for persons retiring at age 65 or later. The guarantee is lower for those who retire early or have survivor's benefits.
Workers and retirees do not need to take any action. Anyone with questions about benefits or wishing to retire may contact PBGC's Customer Service Center toll-free at 1-800-400-7242. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to 800-400-7242.
PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by some 42 million American workers and retirees participating in more than 44,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and investment returns.
