Know a person who had sent paperwork in and it was received before this latest news broke about bankruptcy.
When calling about it, it was hinted to her that it’s too late..
My question is, if they received info before the talk of bankruptcy, wouldn’t they have to honor it?
If she can’t cash it out, won’t she just get her monthly pension?
This quote is from The New York Times on 10/14/2018.
"As many as 100,000 retired Sears employees still receive pensions, which are expected to emerge largely unscathed in the bankruptcy. As the company was bleeding cash and selling off assets in recent years, federal regulators required Mr. Lampert to inject cash into the pension plan."
https://www.nytimes.com/2018/10/14/business/sears-bankruptcy-filing-chapter-11.html
I saw this on the form 5500
https://www.efast.dol.gov/portal/app/disseminatePublic?execution=e1s2#
On March 2, 2017, the Plan's enrolled actuary certified that the December 1, 2016 funded status was still less than 80%, but at least 60%. Therefore, restrictions on accelerated distributions for the Plan are continued through at least February 28, 2018.
On April 2, 2018, the enrolled actuary certified that the December 1, 2017 funded status for Plan 1 was at least 80%. Therefore, restrictions on accelerated distributions for Plan 1 were lifted effective April 2, 2018, and will remain lifted through at least February 28, 2019.
There was also language in the document that PBGC has the power to stop some kinds of distributions.... so I guess we'll have to wait and see what they are going to do. But from what I can tell, Sears has made orderly payments to the plan and is pledging to contribute some of the Stanley Black and Decker proceeds to the pension for the next 5 years.
According to a letter sent to Plan 1 associates, the plan is considered fully funded until Feb 2019 by federal law. Until then, lump sum distributions are allowed. This letter was mailed in March/April of 2018. If the plan was underfunded then I could understand. If the person mentioned (who was denied) put in his paperwork now, pension plan admin requires 90 days to process.... that would put us at mid January and they won't start benefits mid month (what I was told) so we are looking at Feb 2019... perhaps that is what the issue is? (then he /she would be getting into the Feb 2019 limit stated in the letter) I know because I spoke to them a couple months ago when I filed. They were very strict about the 90 day rule.
@jph - The pension is a fund that is governed and protected by the rules of the PBGC. The money in the fund is what pays pension benefits. Bankruptcy doesn't affect the assets already in the fund. In the case of bankruptcy the PBGC will take over administration of the pension fund. If the pension fund is not fully funded, then the PBGC will guarantee a pensioner's annual pension payments up to $65,000. Extremely few SHLD pensioners are entitled to $65,000 per year! See the link below.
https://www.pbgc.gov/
So how is the pension situation in Canada relevant to SHLD? Canada is a different country with a different set of laws and does not have the PBGC. Sears Canada was a different company as well.
I am confused why you think a bankrupt company, which means does not have money to pay its debts, would be able to pay the pension money that it owes former employees. It is bankrupt because it does not have money. This is why you are better off with a 401k.
30% loss on Sears Canada pensions due to insufficient funding of the DB plan.
They have sent out direct payouts in the past.. They could have another one if they fill bankruptcy to finalize with the PGF deal, could have mandatory payouts you never know what this company will do.
Here’s what I know.
When I quit and moved onto much greener pastures, I pulled 100% of my pension but I was in group B. Group A, mainly the retail side, was only able to get monthly payouts. Now, if bankruptcy is declared, those payouts could be cut in half, just ask the pensioners from Sears Canada.