LandAmerica pension plan assumed by PBGC ahead of stock sale hearing

By Caroline Salls

Pittsburgh, May 11 - The Pension Benefit Guaranty Corp. is taking responsibility for LandAmerica Financial Group Inc.'s underfunded pension plan covering 9,600 LandAmerica employees and retirees, according to a PBGC news release.

According to the release, the PBGC's move to assume the pension plan comes ahead of a May 14 bankruptcy court hearing on the sale of stock in LandAmerica subsidiaries. Since it is ending the pension plan before the sale, the agency said the company's subsidiaries will still be liable for the plan's unfunded benefit liabilities.

Under the Employee Income Retirement Security Act of 1974, the PBGC said it is empowered to collect claims from members of a plan sponsor's controlled group, such as the subsidiaries of LandAmerica that may be sold this week.

The PBGC said the LandAmerica Cash Balance Plan is 85% funded, with assets of $210 million and benefit liabilities of $246 million. The agency said it expects to cover the entire $36 million shortfall.

Specifically, the PBGC said it will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which was scheduled to end on May 11.

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.

LandAmerica, a title insurance underwriter based in Glen Allen, Va., filed for bankruptcy on Nov. 26 in the U.S. Bankruptcy Court for the Eastern District of Virginia. Its Chapter 11 case number is 08-35994.

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