PBGC takes over Nortel Defined Pension Plan

The PBGC announced today in a number of media sources that it will take over the Nortel Defined pension plan. Here is the notice as seen in the Atlanta Journal Constitution.

Attention All Participants, Retirees and Beneficiaries of:
Nortel Networks Retirement Plan
The Pension Benefit Guaranty Corporation (PBGC), a United States government agency, has determined under provisions of the Employee Retirement Income Security Act of 1974 (ERISA) that the above pension plan must terminate effective July 17,2009 and that the PBGC should become statutory trustee of the pension plan.

As of July 17,2009, participants cannot earn additional benefits under the plan. PBGC will seek to take over the plan assets and assume responsibility for paying benefits. In the interim, Nortel Networks Inc. remains responsible for payments of plan benefits.

PBGC will guarantee benefits, according to plan provisions, up to the maximum amounts allowed by ERISA. Current retirees will experience no interruption in benefit payments. As participants become eligible for retirement under the plan and complete the required forms, PBGC will begin to pay their pension benefits. PBGC currently pay benefits to around 640,000 individuals in 3,860 pension plans it has previously taken over. The maximum guarantee for workers in plans that terminate in 2009 is $4,500.00 a month (or $54,000.00 a year) for persons retiring at age 65. Maximum guarantees are adjusted for retirees at other ages or those who elect survivor benefits.


Press Release at http://www.pbgc.gov/media/news-archive/news-releases/2009/pr09-47.html