PBGC has been working with Sears for several years to improve financing of the company`s plans and reached an agreement for the first time in 2016. As part of agreements with the Agency, Sears first sold its Craftsman brand to obtain funds for retirement plans, and was then allowed to sell real estate to raise funds. “This agreement with the PBGC is another positive step forward that will provide financial flexibility to our company after its closure, while supporting our commitment to meet our obligations to associate employees and retirees covered by retirement plans,” said Edward S. Lampert, President and CEO of Sears Holdings. “While the low-interest environment has had a significant and adverse impact on the financing of retirement plans, Sears Holdings has demonstrated its commitment to meeting this commitment. Sears Holdings Corporation (NASDAQ: SHLD) is a leading integrated retailer focused on integrating digital and physical shopping experiences to serve our members where, when and how they want to shop. Sears Holdings is home to Shop Your Way®, a social shopping platform that offers members rewards for their purchases at Sears and Kmart as well as with other business partners in all categories important to them. The company operates in the United States through subsidiaries such as Sears, Roebuck and Co. and Kmart Corporation, with full and special retail stores. For more information, see www.searsholdings.com PBGC protects the pension benefits of nearly 37 million Americans in private retirement plans. The Agency manages two separate insurance plans, one for single-employer-sponsored retirement plans, the other that covers multi-employer retirement plans, sponsored by more than one employer and managed under collective agreements.
PBGC is currently responsible for the benefits of approximately 1.5 million people in failed retirement plans. PBGC does not receive taxpayers` money. The financing of their business is provided by insurance premiums, capital income and, for the program for single-parent employers, through assets and recoveries on default plans for a single employer. For more information, see PBGC.gov. Pension Benefit Guaranty Corp. said Thursday that it has reached an agreement with Sears Holdings Corp. and is withdrawing its objection to the proposed sale of Sears` assets to President Edward Lampert and his hedge fund ESL Investments. WASHINGTON – Pension Benefit Guaranty Corporation has entered into an agreement with Sears Holdings Corporation under which the agency will withdraw its objection to the sale of Sears` assets to ESL Investments. The agreement also paves the way for PBGC to take responsibility for Sears` two retirement plans, which fall under PBGC`s single-earner insurance program. The agreement is subject to approval by the White Plains Bankruptcy Court in New York. Details of the agreement will be submitted to the court. The PBGC stated that it assumed that its guarantee would cover the “vast majority” of pension benefits acquired under Sears` plans.
Retirees who have questions about what support would mean for their pension can visit www.pbgc.gov/Sears-QA. The agreement announced Thursday exists only between the PBGC and Sears. The sales contract, which was disclosed friday in an administrative notification, does not contain pension plans. This agreement also paves the way for PBGC to assume responsibility for Sears` two pension plans, which fall under the PBGC`s employer insurance program. As part of their agreement with PBGC, Sears agrees to protect the assets of subsidiaries that own real estate and their intellectual property, but they will have attached so-called “Springing Links” to them, which will be triggered when Sears stops paying pension contributions, prohibits any transfer of ownership to subsidiaries or announces its plan.