PBGC will pay retirement benefits for more than 200 current and future retirees of Bill Johnson's Restaurants Inc. The eatery has five locations throughout Arizona.
The agency is stepping in because the pension plan doesn't have enough money to pay benefits when due. Also, Bill Johnson's is attempting to reorganize in bankruptcy proceedings and will likely abandon the plan when the case concludes leaving no one to administer benefits.
The restaurant chain operates under the Bill Johnson's Big Apple brand, and its retirement plan, the Defined Benefit Plan of Bill Johnson's Restaurants Inc., will end as of April 4, 2013.
PBGC will pay all pension benefits earned by the company's retirees up to the legal limit of about $57,500 a year for a 65-year-old.
According to PBGC estimates, the plan is 39 percent funded with $3.9 million in assets to pay $10.5 million in benefits. The agency expects to cover $6.1 million of the $6.5 million shortfall.
Until PBGC becomes trustee, the plan remains under the control of Bill Johnson's. Plan participants will be notified by letter when the agency takes responsibility. At that time, retirees will continue to get benefits without interruption, and future retirees can apply for benefits when eligible.
Participants with questions about their pension benefits should contact the plan administrator. PBGC won't be able to address concerns about benefits until it takes responsibility for the plan.
The restaurant chain was founded by the husband and wife team of Bill and Gene Johnson in 1956. The business grew with locations throughout Arizona in Phoenix, Mesa, and Avondale. The restaurant serves Western-style fare with menu items featuring barbecue and comfort food.