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5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
The PBGC has initiated court action to protect the pension benefits of more than 26,500 workers and retirees of Lehman Brothers Holdings, Inc., and its subsidiaries.
Lehman Brothers is a New York City-based financial services firm that is operating under bankruptcy court protection. Lehman Brothers’ problems became evident earlier this year amid tightening credit markets and the loss of liquidity. Unable to borrow cash to maintain operations, the firm filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of New York on September 15, 2008. Five days later, the bankruptcy court approved the sale of substantially all of Lehman Brothers’ capital markets and investment banking operations to Barclays Capital, Inc., for $1.75 billion.
According to PBGC estimates, the Lehman Brothers Holdings, Inc., Retirement Plan is 95% funded, with $898.2 million in assets to cover $940.8 million in benefit liabilities. If the plan is terminated, the PBGC expects to be responsible for $17.9 million of the $42.6 million shortfall. The PBGC has said that assumption of the plan’s unfunded liabilities will have no material effect on the PBGC’s financial statements, according to generally accepted accounting principles.
The PBGC has filed a motion with the U.S. District Court for the Southern District of New York to seek approval to terminate the Lehman Brothers plan. The agency’s court action came ahead of a December 22, 2008, bankruptcy court hearing on the sale of Lehman subsidiaries that make up the firm’s investment management business. The PBGC acted prior to the sale so that the subsidiaries being sold remain liable for the pension plan’s unfunded benefit liabilities. The PBGC acted to terminate the Lehman Brothers plan because it stands to be abandoned following the liquidation of substantially all of the firm’s assets, and the increased financial risk to the agency if the subsidiaries involved in the current sale exit the controlled group and escape liability for the pension plan. None of the buyers have assumed responsibility for the pension plan. The plan was scheduled to terminate effective as of December 12, 2008. Until the PBGC becomes trustee of the pension plan, the plan remains ongoing under Lehman Brothers’ sponsorship.
SOURCE: PBGC News Release No. 09-06, December 12, 2008.
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