WASHINGTON, D.C. — The Pension Benefit Guaranty Corporation (PBGC) is taking responsibility for the J.C. Penney Corporation, Inc. Pension Plan, which covers about 36,000 current and future retirees. The retailer, headquartered in Plano, Texas, operates about 690 stores throughout the United States and Puerto Rico.
“This action allows the agency to continue delivering hard-earned benefits as allowed under the law and to provide retirees with information that will help them plan for the future,” PBGC Director Gordon Hartogensis said. “As with all plans we insure, PBGC is acting to protect the retirement security of the J.C. Penney plan participants, and we will continue to do the same for the millions of other workers, retirees, and families who rely on us.”
On May 15, 2020, J.C. Penney Corporation, Inc., along with 17 of its subsidiaries and related entities, filed for Chapter 11 protection in the U.S. Bankruptcy Court in Corpus Christi, Texas.
On October 20, 2020, the company announced it would seek court approval of a proposal in which J.C. Penney’s operating assets would be acquired by a joint venture led by Brookfield Asset Management, Inc. and Simon Property Group. The joint venture did not agree to assume the pension plan, leaving it without an ongoing, viable sponsor. PBGC has stepped in to become trustee of the pension plan to protect the interests of its participants.
The termination of the plan will be effective as of November 6, 2020.
PBGC estimates that J.C. Penney’s plan is 92 percent funded with approximately $3.3 billion in assets and about $3.6 billion in benefit liabilities. The plan is underfunded by $270 million.
Retirees will continue to receive benefits without interruption, and future retirees can apply for benefits as soon as they are eligible. Until PBGC assumes responsibility for the pension plan, participants with questions about their benefits should visit jcpbenefits.com or contact the J.C. Penney Benefits Center at 1-888-890-8900.
PBGC will pay pension benefits earned by J.C. Penney’s current and future retirees up to the legal limits. For additional information, see Questions and Answers for Participants for the J.C. Penney Corporation, Inc. Pension Plan.
About PBGC:
PBGC protects the retirement security of over 35 million American workers, retirees, and beneficiaries in both single-employer and multiemployer private-sector pension plans. The agency’s two insurance programs are legally separate and operationally and financially independent. PBGC is currently responsible for the benefits of about 1.5 million people in failed pension plans and receives no taxpayer dollars. The Single-Employer Insurance Program is financed by insurance premiums, investment income, and assets and recoveries from failed single-employer plans. The Multiemployer Insurance Program is financed by insurance premiums and investment income. For more information, visit PBGC.gov.