Dewey & LeBoeuf Pensions $80 Million Short

Three pensions plans covering 1,800 workers at the troubled Dewey & LeBoeuf law firm were underfunded by more than $80 million and a federal agency charged with protecting pensions has stepped in.

The Pension Benefit Guaranty Corp. moved this week to take on responsibility for the three Dewey pension plans to secure its ability to collect against the firm’s affiliates that share funding responsibility for the plans, it announced.

The  PBGC is an insurer of defined benefit pension plans nationally.  It will pay the shortfall at Dewey, up to the legal limits.  This can sometimes result in a reduced pension payout to retirees.

The PBGC will pay guaranteed benefits up to about $56,000 a year for a 65-year-old retiree.

Current retirees from Dewey will continue to receive benefits without interruption, according to the PBGC.

It oversees 27,500 private-sector pension plans for more than 44 million Americans.  Currently, the PBGC pays benefits to 1.5 million people in failed pension plans.

There is no tax money involved.  The PBGC is financed by the insurance premiums and the assets of failed plans.

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