Pension Benefit Guaranty Corp. is taking the over the pension plan covering more than 9,500 workers and retirees of the now-closed St. Vincent's Hospital in New York City, the agency announced Tuesday. The PBGC intends to prevent the retirement plan's condition from worsening.
Currently, St. Vincent's plan is 55 percent funded, with $622 million in liabilities and $345 million in assets, said PBGC in a statement. Of the plan's $277 million funding shortfall, the pension insurer expects to cover about $267 million, reports Business Insurance.
PBGC's claims will increase by $266.9 million after assuming the plan's unfunded liabilities. However, it was not included in the agency's fiscal year 2009 financial statements, said PBGC.
The pension insurer decided to intervene "because the underfunded plan will be unable to make benefit payments and be abandoned after St. Vincent's assets are liquidated, its activities cease and there is no one left to administer the plan," said PBGC.
No asset buyer had agreed to assume responsibility for the plan since the hospital closed its facilities in May, notes Business Insurance.
The retirement plan will remain under St. Vincent's sponsorship until the PBGC officially becomes trustee, said the agency.
For more:
- read the Business Insurance article
- read the Plan Sponsor article
- check out the PBGC press release