According to a recently released statement, the Pension Benefit Guaranty Corporation (PBGC) will pay retirement benefits for over 500 current and future retirees of B’nai B’rith International.
The agency stepped in because B’nai B’rith would not have been able to pay its bills or stay in business unless the plan was terminated.
The B’nai B’rith pension plan ended as of April 30, 2011. PBGC will pay all pension benefits earned by the organization’s retirees up to the legal limit of $54,000 a year for a 65-year-old.
Following a payment default in January 2011, B’nai B’rith said, “BBI attributed the failure of the pension fund to the sluggish economy as well as provisions of the Pension Protection Act of 2006, which was enacted to strengthen defined-benefit plans, such as BBI’s.
“The PPA increased the level of required funding in an attempt to create more ‘fully funded’ plans while, at the same time time, reducing the number of years the plan had to pay off these obligations,” the statement said. “This change, coupled with the loss of investment income due to changing market conditions, created a gap that required funding that, in many situations, was more than many sponsoring organizations could realistically afford.”
As a result, “like numerous other organizations in recent years … B’nai B’rith has decided that a defined benefit pension plan no longer meets its needs and is unduly burdensome.” The statement concluded: “The overwhelming majority of pension recipients should be fully protected by the PBGC.”
Until PBGC becomes trustee, the plan remains under the control of B’nai B’rith.