Sea Island underfunded pension plan to be assumed by PBGC amid sale

By Caroline Salls

Pittsburgh, Oct. 29 - Sea Island Co.'s underfunded pension plan is being assumed by the Pension Benefit Guaranty Corp., according to a PBGC news release.

The plan covers almost 2,000 Sea Island workers and retirees.

The pension insurer said it is stepping in because the underfunded retirement plan will be unable to make benefit payments and faces abandonment following the sale of substantially all the company's assets, in a transaction that does not include the pension plan.

By taking action now, the PBGC said it prevents further deterioration of the plan's condition.

The Sea Island Company Retirement Plan is 48% funded, with assets of $37.3 million to cover benefit liabilities of $77.2 million, according to PBGC estimates.

The agency said it expects to be responsible for $36.2 million of the plan's $39.9 million shortfall.

The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which terminated as of Oct. 29.

Until the PBGC becomes trustee of the pension plan, the plan will continue to be sponsored by Sea Island.

Sea Island, a St. Simons Island, Ga., resort operator, filed for bankruptcy on Aug. 10 in the U.S. Bankruptcy Court for the Southern District of Georgia. The Chapter 11 case number is 10-21034.

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