More than 21,000 former A&P employees will receive retirement payments thanks to the Pension Benefit Guaranty Corporation (PBGC), the federal agency created to protect workers by assuming pension benefits from private sector employers who are unable to further fund existing pension/retirement plans.
While A&P reportedly received more than $900 million for the sale of stores and other assets, PBGC stepped in because most of the buyers declined to keep the plans going, creating a significant underfunding of approximately $292 million for the combined plans. The three plans that PBGC will assume ended on November 30, 2015.
The agency will pay all pension benefits earned by retirees at A&P and its affiliates up to the legal maximum of $60,136 a year for a 65-year-old. 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 will become responsible for the following pension plans: 1) The Great Atlantic & Pacific Tea Co. Inc. plan. This plan is 55 percent 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. 2) The Pathmark Stores Inc. pension plan is 64 percent 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 the entire $182.3 million shortfall. 3) Another small pension fund, the Delaware County Dairies Inc. hourly employees pension plan has no assets and covers eight people. The plan owes participants $100,000 in benefits. PBGC will cover the entire amount.
Additionally, the New York-New Jersey Amalgamated pension plan for A&P Employees 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.