The Great Atlantic & Pacific Tea Co. supermarket chain based in Montvale, N.J., commonly known for its A&P brand, is the latest employer to require bailing out of its pension plan by the Pension Benefit Guaranty Corporation (PBGC).
PBGC is stepping in because A&P has sold the majority of its assets in bankruptcy proceedings and most of the buyers declined to keep the plans going. The three plans that PBGC will assume ended on Nov. 30, 2015.
“The agency will pay all pension benefits earned by A&P retirees up to the legal maximum of $60,136 a year for a 65-year-old,” the pension insurer explains. “Retirees will continue to get benefits without interruption, and future retirees can apply for benefits as soon as they are eligible.”
During the transition of shifting benefit payment responsibility to PBGC, participants who are in pay status in the company’s pension plans will continue to receive benefits from A&P and its affiliates.
PBGC is becoming responsible for the following pension plans:
The Great Atlantic & Pacific Tea Co. Inc. Plan, which is 55% funded and has 14,783 participants. PBGC estimates that the plan has $135 million in assets to pay $244.4 million in benefit liabilities. The agency expects to cover $105.6 million of the $109.4 million shortfall.
The Pathmark Stores Inc. Pension Plan, which is 64% funded and has 6,278 participants. PBGC estimates the plan has $327.2 million in assets to pay $509.5 million in benefits liabilities. PBGC expects to cover nearly all of the $182.3 million shortfall.
The Delaware County Dairies Inc. Hourly Employees Pension Plan, which has no assets and covers eight people. The plan owes participants $100,000 in benefits. PBGC will cover the entire amount.
The New York-New Jersey Amalgamated Pension Plan for A&P Employees, which has not been terminated and is an ongoing plan. This plan is jointly administered by UFCW Local 464A and Acme Markets Inc. and has been renamed the New York-New Jersey Amalgamated Pension Plan for ACME Employees.
The historic A&P company was founded in 1859 and at its height operated a number of supermarket brands such as SuperFresh, Pathmark, Waldbaum’s and the Food Emporium. On July 19, 2015, A&P and 20 of its affiliates filed for Chapter 11 protection in the U.S. Bankruptcy Court in Manhattan. It was the company’s second Chapter 11 filing in five years. A&P sought bankruptcy protection in December 2010 to restructure its operations and finances. While A&P came out of that previous bankruptcy with its pension plans ongoing, the company was unable to sustain profitability.
For more information, visit www.PBGC.gov.