News & Policy

The Pension Benefit Guaranty Corporation (PBGC) today assumed responsibility for the pension plan of more than 6,500 people who worked for the bankrupt Payless Cashways, Inc., once the nation's fourth-largest retailer of building materials and home improvement products. Based in Lee's Summit, Mo., the company operated stores in 12 Midwestern and Southwestern states, doing business in California as Lumberjack Building Materials, in New Mexico as Furrow Building Materials, and in Colorado as Hugh M. Woods.

"PBGC is stepping in because the company is liquidating in bankruptcy and can no longer sponsor the pension plan," said John Seal, Acting Executive Director of PBGC. "The pension benefits of Payless Cashways workers are protected because the plan was insured by PBGC. Those who are already retired will continue to receive their monthly checks without interruption."

The Payless Cashways, Inc. Amended Retirement Plan, with assets of about $54 million to cover benefit liabilities totaling around $87 million, is underfunded by $33 million according to PBGC estimates.

The plan was terminated as of November 26, 2001. Under federal pension law, the maximum pension guaranteed for workers in plans that terminate in 2001 is $3,392.05 a month (or $40,704.60 a year) for persons retiring at age 65. Maximum guarantees are adjusted for those who retire at other ages or those who elect survivor benefits. PBGC estimates that most Payless Cashways workers will receive their full benefit.

Workers and retirees do not need to take any action. Payless Cashways pension plan participants who have questions about benefits or who wish to retire may contact PBGC's Customer Service Center toll-free at 1-800-400-PBGC (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 also provides information pertaining to Payless Cashways on the Trusteed Plans Info section of its Web site, www.pbgc.gov,

In addition to California, New Mexico and Colorado, Payless Cashways had retail operations in Arizona, Iowa, Kansas, Missouri, Nebraska, Nevada, Oklahoma, Tennessee, and Texas.

PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by more than 43 million American workers and retirees participating in nearly 38,000 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 by PBGC's investment returns.