Circuit City underfunded pension plan assumed by PBGC amid liquidation

By Caroline Salls

Pittsburgh, May 27 - Circuit City Stores, Inc.'s pension plan covering more than 21,000 former workers and retirees has been assumed by the Pension Benefit Guaranty Corp., according to a PBGC news release.

The agency said it stepped in because the underfunded pension plan will be abandoned following the liquidation of the company's assets.

Retirees and beneficiaries will continue to receive their monthly benefit checks without interruption, and other participants will receive their pensions when they are eligible to retire.

On the basis of company-provided information, the PBGC said it estimated that the Retirement Plan of Circuit City Stores was 82% funded, with $284.9 million in assets to cover $349 million in benefit liabilities.

Of the estimated $64 million shortfall, the PBGC will be responsible for about $62 million.

The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which ended on March 31.

Circuit City, a Richmond, Va., electronics retailer, filed for bankruptcy on Nov. 10, 2008 in the U.S. Bankruptcy Court for the Eastern District of Virginia. Its Chapter 11 case number is 08-35653.

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