Wieboldt Stores Plans to End Pension Plan
CHICAGO (AP) _ Wieboldt Stores plans to end its company pension plan and has told vested employees and retirees that there may not be enough money to cover their benefits, company officials say.
The Chicago-based retailer, which is operating under Chapter 11 bankruptcy protection, told workers and pensioners of the planned termination in a letter mailed Monday, prompting a rush for information by past and present employees.
An official of Local 372 of the Service Employees Union said Thursday that the local has been flooded with calls from worried Wieboldt’s workers.
″They were saying ’My God, I’m going to lose my pension,‴ said union vice president Joe Lamm. ″On the surface it’s very alarming. Our attorney is looking into it to see if it’s a tactic to bail them out.
″If it is, we will do whatever is necessary (to stop it), including going to court,″ he said.
The union represents about 400 Wieboldt employees. Lamm estimated that the pension plan applies to thousands of former workers.
In addition to terminating the pension plan, the company this week dismissed its four buyers and three of the four remaining sales promotion staff. President Stanley Seiden said he now is doing the buying for the company with some outside help.
″We’re continually trying to streamline the company to remain viable,″ Seiden said.
In the letter, the company said the proposed pension termination date is July 7 and that benefits currently being paid or expected to be paid ″may be reduced″ at that time. The letter also said the plan administrator ″believes the assets may not be adequate to provide (vested) benefits.″
Seiden who signed the letter, declined to comment on the extent of the possible underfunding.
The pension plan filed a claim against Wieboldt’s last year for nearly $249,000 in contributions owed before the company filed for protection from creditors in September, according to an attorney representing the retailer.
Bruce Harwood, a Chicago attorney representing the retailer, said Wieboldt’s would ask U.S. Bankruptcy Court within a week for permission to terminate the plan.