Former employees of bankrupt Tom's Foods will soon be informed that their underfunded pension plan has been taken over by Pension Benefit Guaranty Corp.
The federal corporation announced the takeover this week.
What it means to the nearly 3,000 people enrolled in the Tom's Foods plan depends on the person drawing the retirement funds. For some there will be no impact on retirement benefits. For others, it could mean a reduced monthly amount.
"I am not happy about it," said Lyn Anderson, who retired as vice president of finance in 2001 at the age of 57. "The Pension Benefit Guaranty Corp. does not guarantee all of the pension. I retired early as did others. That lowers the amount I will get from my pension if it was fully funded."
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Tom's workers and retirees with questions about their pension, can consult the Pension Benefit Guaranty Corp. Web site at www.pbcg.gov or call 1 800 400-7242.
The federal corporation said the plan is currently funded at about $44 million. The expected shortfall is $43 million. The agency will take over the assets and use PBGC funds to pay guaranteed benefits earned under the plan, which was terminated Oct. 21, 2005.
In April 2005, Tom's Foods, an 80-year-old Columbus snack-food maker, filed for Chapter 11 bankruptcy protection. By the end of 2005, the company was sold to Charlotte, N.C.-based snack-food maker Lance Inc., which purchased Tom's for $37.9 million.
Fife Whiteside, a Columbus attorney who represented an ad hoc committee of retirees, said the takeover by the Pension Benefit Guaranty Corp. is a non-event.
"It was clear from the day the day the debtors shut down the business operation that the PBGC would eventually take over the plan," Whiteside said. "There was no doubt about it."
The formula used to determine the amount of a pension is complex, Whiteside said. Some of the factors or the amount of the pension, the amount of time a worker spent with the company and when an employee took a pension and the conditions of that pension.
"Nobody has missed a check," Whiteside said. "And it is probably true that nobody will miss a check, but some of the checks may change."