PBGC Will Take Over Sears Pension Plans

In a news release on January 18, 2019, the Pension Benefit Guaranty Corporation (PBGC) announced that it would take responsibility for Sears’ pension plans, which cover more than 90,000 people.  A hedge fund run by Eddie Lampert, the former CEO of Sears won a bankruptcy auction with a $5.2 billion proposal to keep the company in business and preserve 45,000 jobs.  The purchase agreement did not include the two pension plans.  Lampert’s offer must still be approved by the U.S. Bankruptcy Court for the Southern District of New York and is being opposed by a committee of Sears’ creditors. It is estimated that Sears’ two pension plans are underfunded by about $1.4 billion.  As a creditor in the Sears bankruptcy, the agency could attempt to recover some of that money through the bankruptcy.