US - The Pension Benefit Guaranty Corporation (PBGC) has assumed responsibility for the underfunded pension plan covering about 460 employees and retirees of bankrupt law firm Coudert Brothers LLP.
The PBGC stepped in because New York based Coudert Brothers, missed US$2.2m in required pension contributions and the pension plan will now be abandoned as a result of the firm's dissolution.
PBGC said retirees and beneficiaries would continue to receive their monthly benefit checks without interruption, and other participants would receive their pensions when they reach retirement age.
According to PBGC estimates, Coudert Brothers LLP Employees Pension Plan is about 66 percent funded, with some $17 million in assets to cover about $26 million in benefit liabilities.
The agency expects to be liable for $8.5 million of the $9 million shortfall.
This means it will take over the assets and use PBGC insurance funds to pay guaranteed benefits earned under the plan, which terminated on 31 Dec 2006.
It added that assumption of the plan’s unfunded liabilities would have no material effect on PBGC’s financial statements, according to generally accepted accounting principles.
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