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Re: [OM] Kodak Chapter 11

Subject: Re: [OM] Kodak Chapter 11
From: <sctroy@xxxxxxx>
Date: Thu, 19 Jan 2012 17:41:42 -0500 (EST)
>From: Andrew Fildes

>I still can't understand how a corporation can have ANY access to pension 
>funds, bankruptcy notwithstanding. Reinvesting pension funds into the company 
>or for the benefit of the company would be unethical, surely, if not actually 
>fraudulent?


The way it works here in the US is that a Company can generally only pull cash 
out of "overfunded" plans - plans that have more assets than needed to pay 
benefits under the plan.  Virtually no plans are overfunded these days thanks 
to the stock market.

For the other scenario, where the company hasn't put enough funds into the plan 
and it's underfunded, a company may be able to shed the underfunded liability 
in a bankruptcy, which is where the PBGC (Pension Benefit Guaranty Corporation, 
a government entity) takes over the liability under the plan.  The PBGC has 
limits on benefit payments, so people with the bigger pension payments under 
the plan may take a payment haircut.  The PBGC is funded by insurance premiums 
all plans/companies have to pay.

No one will be "left out in the cold," regardless what you may hear in the 
press.

Steve Troy
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