The PBGC announced Friday that it will take responsibility for the defined benefit plan of Menninger Foundation, Topeka, Kan. which is 33% funded, according to agency estimates.
The defined benefit plan was frozen in 2003. In 2006, when the newly passed Pension Protection Act created more stringent funding requirements for corporate defined benefit pension plans, “that's when things got difficult. We were not able to keep up with the payment demand,” Shawna Morris, senior vice president and chief operating officer of the Menninger Clinic and corporate secretary of the foundation, said in an interview.
In 2011, the Pension Benefit Guaranty Corp. placed liens totaling $25.6 million against the organization, said agency spokesman Marc Hopkins in an interview. The status of the liens was not immediately clear, and Ms. Morris said was not aware of them.
The pension plan has $32.5 million in assets to pay $97.4 million in benefits, and PBGC officials expect to cover most of the $64.9 million shortfall.
Employees of the Menninger Clinic in Houston are participants in a 403(b) plan and not the Menninger Foundation DB plan.