Will employee pensions be paid if Sears goes into Chapter 7 bankruptcy. There are over 100k Sears retirees. Just wondering
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I believe Sears pension plan 1 is fully funded until the end of Feb 2019 by law according to a letter I received back in March or April of this year. If they file for BK then assuming that if one is eligible you are still able to get a lump sum distribution if one retires before Feb 2019. The only question I have is who becomes the administrator of the plan, PBGC or Sears pension dept, and when this transition occurs. I filed for retirement a couple months ago but Sears pension dept said I have to wait until my severance package & health insurance stops which sounds like it could occur next week (was supposed to end in Nov). I checked healthcare.gov for health insurance and the premiums for me were even higher than what COBRA would be, we'll have to see how it all plays out. I know BK has been predicted for Sears on and off for the last 3 or 4 years but now that we are on the doorstep and even though we all knew it was coming, it's still a bit of a shock if and when it happens... like watching a very sick family member hang on until the end but when they actually pass away it's still a little hard to take.
What about vacation time?
@bwy - What you stated is incoherent nonsense! Those with questions about the PBGC can use this link.
https://www.pbgc.gov/about/how-pbgc-operates
@jjj - That is annually. One thing to remember is that the SHLD pension plan is not in that bad of shape. It is funded at about 80%, which is pretty good for a company with financial difficulties.
Invest that lump sum wisely and you will do fine. A pension is just a type of annuity and many insurance companies offer annuities that can guarantee you lifetime income. Annuities come in many varieties, so research them thoroughly. Good luck on your journey to financial fulfilment!
You will get penny's to the dollar. As long you stay with the company. If you leave the company before the BK happens then all you pension is protected by the PBGC.
@gnd - does PBGC guarantee that ANNUALLY or TOTALLY. That would make a difference. I cashed out last month and got a lump sum - feeling like a genius
@clz - How a bankruptcy affects a company's pension plan is unique to each situation. To compare Monsanto to SHLD is like comparing apples to oranges. First, not all SHLD pensioners are covered under the same plan. SHLD converted a number of pensioners over to annuities run by an insurance company. A SHLD bankruptcy would have no effect on those people. Second, the PBGC guarantees pensions at 100% up to $65,000. Extremely few SHLD associates would have a yearly pension payout that high! Even those few with pensions over $65,000 may not be affected; it all depends on how the pension fund looks after all the dust settles. The vast majority of SHLD pensioners can rest assured that their benefits will not be affected by a SHLD bankruptcy!
Pension Benefit Guaranty Corporation takes them over. Benefits likely reduced significantly. Ask people who went through Monsanto's bankruptcy.