The Pension Benefit Guarantee Corporation, the federal agency charged with protecting retirement income, announced Friday that it would take over the pension programs for workers for the Sears Holding Corporation, which includes the iconic retailer and its subsidiaries like Kmart.
The PBGC said Sears’ programs were underfunded by about $1.4 billion and could only meet about two-thirds of its obligations.
“PBGC is stepping in to become responsible for the company’s two pension plans because it is clear that Sears’ continuation of the plans is no longer possible,” the agency said in a statement. The agency plans to terminate the pension plans as of the end of the month and will assume responsibility for their obligations when either Sears agrees or a court orders it.
Sears, a company founded in 1886 and synonymous with catalogue sales, filed for bankruptcy in October with $7 billion in assets, one of largest-ever filings for a retailer. It had suffered for years due to rise of e-commerce. In the last decade, Sears shuttered or sold off about 1,700 outlets, including 60 percent of Sears stores and three-fourths of Kmart stores, according to the Wall Street Journal.
