PBGC to assume responsibility for SP Newsprint pension plan payments

By Caroline Salls

Pittsburgh, Aug. 21 - The Pension Benefit Guaranty Corp. will pay retirement benefits for nearly 1,300 current and future retirees of SP Newsprint Co., LLC, according to a PBGC news release.

The PBGC said it is moving to take responsibility for SP Newsprint's two pension plans because the company intends to sell its assets in bankruptcy proceedings. The buyers are not assuming the pension plans.

Until the PBGC takes responsibility for the pension plans, they will continue under company sponsorship.

The SP Newsprint Co. Pension Plan and the SP Newsprint Co. Union Pension Plan are 49% funded with $74.4 million in assets to cover $150.7 million in benefits, according to PBGC estimates.

The agency said it expects to cover $73 million of the $76.3 million shortfall.

SP Newsprint, a Greenwich, Conn.-based newsprint producer, filed for bankruptcy on Nov. 15, 2011 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 11-13649.

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