43
Agency will pay Forum pensions
FORUM HEATH
Pension help
Here are key points in the help from the federal Pension Benefit Guaranty Corporation for almost 7,000 workers and retirees of Forum Health in Youngstown.
For information, go to the PBGC website, www.pbgc.gov or call toll-free at 1-800-400-7242. TTY/TDD users may call the federal relay service toll-free at 1-800-877-8339 and ask for 800-400-7242.
Forum Health retirees who get their pension from the PBGC also may be eligible for the federal Health Coverage Tax Credit. The HCTC now pays for 80 percent of qualified health-plan premiums. For more information, they can go to the PBGC website at www.pbgc.gov/workers-retirees/benefits-information/content/page13692.html.
Source: Pension Benefit Guaranty Corporation
Staff report
YOUNGSTOWN
The federal Pension Benefit Guaranty Corporation will pay the pensions of almost 7,000 workers and retirees of Forum Health.
The announcement was released early today, and follows a statement last year from the PBGC that retirees would not miss pension checks nor should current workers when they retire.
The federal pension insurer paid more than $115 million to area residents in 2010.
PBGC, which safeguards the pensions of 44 million Americans, stepped in to take over bankrupt Forum’s defined-benefits pension plan because the hospital system went out of business and filed for bankruptcy protection in March 2009.
Community Health Services, a Tennessee-based health-care operation, bought Forum Health for $120 million in August 2010. CHS is not liable for Forum’s pension obligations under its purchase agreement.
Forum Health retirees will continue to receive their monthly benefit without interruption, and other workers will receive their pensions when they are eligible to retire.
“PBGC is America’s retirement safety net,” PBGC Director Josh Gotbaum said. “When companies fail, we keep their pensions going.”
Within the next several weeks, PBGC will send notification letters to all participants in the Forum Health plan.
In general, PBGC will pay the benefit that a retiree would earn if they retired at age 65.
There is a legal maximum of $54,000 per year for a 65-year-old, however, and lower for people who retire before 65 or choose survivor benefits.
Certain early-retirement payments and recent benefit increases are generally not covered.
“The PBGC trusteeship is a very important protection for the future of these pensions,” said U.S. Rep. Tim Ryan of Niles, D-17th. “Retirement security is one of the fundamental concerns we all share throughout our lives, and I hope today’s announcement alleviates any uncertainty of the pension plan’s future for these retirees.”
Ryan added, “I especially appreciate the cooperation of our local labor unions in working with hospital management to secure this agreement.”
In the 17th Congressional District, which includes portions of Mahoning, Trumbull, Portage and Summit counties, the PBGC paid more than $115 million in pension benefits to more than 13,000 residents last year. The agency also expects to send checks to an additional 6,000 residents upon retirement age.
The PBGC receives no taxpayer funds, but it will take over the pension-plan assets and use insurance premiums to pay covered benefits.
It gets its money from assets of pension plans it takes over, which by their nature are underfunded; from premiums that pension-plan sponsors pay; and from investments.
According to PBGC estimates, the Forum Health pension plan has $228 million to cover $402 million in benefit promises. The agency expects to pay $150 million of the $174 million shortfall, said Jeffrey Speicher, the PBGC’s deputy director of communications and public affairs.