The Pension Benefit Guaranty Corporation (PBGC) and Sears Holdings Corporation have reached a new agreement that will provide, upon closing, approximately $500 million in funding for Sears’ two pension plans, including contributions already made by Sears since August 2017. The pension plans cover about 100,000 participants. Closing on the agreement should occur in about 3 months, according to a PBGC press release.
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The new agreement amends the March 2016 agreement between PBGC and Sears, under which Sears agreed to protect the assets of certain special-purpose subsidiaries holding real estate and intellectual property for the benefit of the Sears pension plans.
Earlier this year, PBGC and Sears amended the March 2016 agreement to accommodate the sale of the Craftsman brand. Now, this new amendment allows Sears to monetize the real estate protected in the March 2016 agreement, with the proceeds used to fund the pension plans. The non-real-estate-related pension protections in the March 2016 agreement are unaffected by the new agreement.