After Chapter 11, PBGC Assumes Responsibility for Chicago Sun-Times Pensions

(August 16, 2010) — The Pension Benefit Guaranty Corporation (PBGC) has assumed responsibility for seven pension plans covering nearly 2,360 workers and retirees of the Chicago Sun-Times newspaper group, which suffered a severe drop in advertising revenue largely brought on by decreasing ad buys from the automotive and housing sectors, as well as a concurrent drop in companies’ posting employment opportunities.

According to PBGC, the seven plans are 54% funded, with $55.8 million in assets to cover $106.5 million in benefit liabilities. The firm expects to be responsible for $49.1 million of the $50.7 million shortfall. PBGC assumed action because the company sold its assets in bankruptcy proceedings and the buyer failed to assume the plans.

PBGC, which assumed responsibility for the plans on August 4, will take over the assets and use insurance funds to pay guaranteed benefits earned under the plans, which ended October 8, 2009. Retirees will continue to receive their uninterrupted monthly benefit payments, while workers will get their pensions when they are eligible for retirement.

The plans are:

• Chicago Sun-Times Office Employees’ Pension Plan
• Chicago Sun-Times Guild Employees’ Pension Plan
• 1986 Chicago Sun-Times Pension Plan
• Pioneer Newspapers Inc. Retirement Income Plan
• Retirement Plan for Bargaining Employees of Daily Southtown Inc.
• Retirement Plan for Employees of Star Publications Inc.
• Pension Plan for Salaried Employees of Holladay-Tyler Printing Corporation

The PBGC guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 29,000 private-sector defined benefit pension plans, the group said. The agency receives no funds from general tax revenues, and operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns.