Avaya Pension Plan Payments: Mostly Good News, But Some Pain
Avaya‘s latest plan to exit bankruptcy contains mostly good news for pension plan participants. But there’s also some painfully bad news for about 800 retirees, according to Wall Street Journal analysis.
First, the big picture: Avaya plans to exit bankruptcy and emerge as a public company with a new CEO — Jim Chirico — later this year, according to a plan revealed earlier this week.
Assuming the plan wins court approval, here are the implications for pension plan participants, according to The Journal:
- The Potentially Good, Part I: Benefit payments to nearly 8,000 participants in a legacy pension plan for salaried workers will be taken over by the Pension Benefit Guaranty Corp., the federal government’s retirement guarantor, the Journal notes. For those 8,000 participants, the payments essentially are unchanged.
- The Potentially Good, Part II: Payments to another 6,900 people in a separate plan covering hourly employees will remain the company’s responsibility after it surfaces from bankruptcy, the Journal adds.
- The Bad: Roughly 800 other beneficiaries who, in addition to their regular PBGC-backed plans, will only receive 8 cents on the dollar for their participation in a supplemental retirement plan under a separate program, the Journal notes. Avaya had halted those supplemental payments in February 2017.
While ChannelE2E mainly covers Avaya’s partner program, readers have called on us for regular updates about the company’s pension plans’ status.