Sears Holdings to offer lump sum, adds to pension contribution
By Kevin Olsen | September 14, 2012 3:46 pm
Sears Holdings Corp., Hoffman Estates, Ill., plans to offer lump-sum payouts to some participants in its defined benefit pension plan, and contributed an additional $203 million to bring the plan to 80% funding, according to an 8-K filed with the SEC.
The company has not announced who will qualify for the lump-sum payments, said spokeswoman Kimberly Freely in an e-mail. She declined to provide further information.
The fair value of the company's U.S. defined benefit plan was $4.1 billion as of Jan. 28, with a funded status of 66.3%.
Sears had expected to make about $314 million in pension contributions in 2012, but increased the contribution to reach the 80% threshold to meet requirements in the Pension Protection Act of 2006 to offer a lump sum.
Sears is looking to reduce its pension obligations, according to the 8-K. It is also reducing its estimate of 2013 contributions to $350 million, down from between $380 million and $430 million, reported in an 8-K filing in July. Sears originally planned to contribute $740 million in 2013 when it released its annual report in January, but revised the numbers following the funding relief provided in the federal highway bill enacted in July.