A November news release from the Pension Benefit Guaranty Corp. had said the agency was taking over the retailer's defined benefit plan following its filing for Chapter 11 protection in U.S. Bankruptcy Court in May 2020. At the time, the PBGC said it had already stepped in as trustee in the plan because it was without a sponsor.
"We wanted to find a better solution for our pension plan participants than the distress termination," said Steve Whaley, J.C. Penney's senior vice president, principal accounting officer, controller and chairman of the benefit plan investment committee, in the news release. "With the assistance of multiple pension termination experts, we reached an agreement with Athene Holding Ltd. to purchase annuities for all pension plan participants in conjunction with the plan termination."
According to November PBGC estimates, the J.C. Penney Corp. Inc. Pension Plan was 92% funded with $3.3 billion in assets and $3.6 billion in benefit liabilities. According to the company's most recent 10-K filing in January 2020, the pension plan had $3.5 billion in assets and $3.2 billion in liabilities, and was 120% funded.
Aubrey DeZego, J.C. Penney spokeswoman, emailed a statement from the company that confirmed the annuity contract and that participants will receive all benefits accrued through Dec. 31.
“We are thrilled that this one-of-a-kind transaction will enable the pension plan to pay the benefits that J.C. Penney intended the participants to receive,” the statement said.
