The Pension Benefit Guaranty Corporation (PBGC), the federal agency that insures private defined-benefit pension plans is taking over payments for nearly 3,000 workers and retirees of Tom's Foods.
The PBGC estimates that the bankrupt snack-food maker's pension plan has assets of about $44 million dollars to cover promised benefits totaling $87 million. The agency says it expects to be responsible for most of the shortfall.
Tom's Foods filed for Chapter 11 bankruptcy protection in April 2005. The company was purchased by Lance six months later, but that did not include the pension plan.
The PBGC's intervention means retirees and beneficiaries will continue to receive their monthly benefit checks without interruption. Other participants will receive pensions when they reach retirement age.