The Avaya Retirees Chapter of the National Retiree Legislative Network (NRLN) Officers after conferring with the NRLN President Bill Kadereit would like to clarify some items in a previous
post on the Just Chatting section.
Stating that "The PBGC would seize Avaya's assets to ensure that our pensions would continue to be paid for if Avaya goes bankrupt" should be clarified:
PBGC (Pension Benefit Guaranty Corporation) scans financing activities such as bond rating changes and company disclosures in SEC 10Q and 10K filings and maintains a list of troubled firms. This is referred to as their early warning system.
PBGC has a seat on bankruptcy "creditor committees". This would include major holders of Avaya's (in this case) debt. This gives them a perfect view from which they can analyze the ability of a company to fund and thus keep alive a pension plan. The PBGC cannot seize pension plan assets at any time prior to a distress termination approved by the court.
PBGC may intercede during bankruptcy proceeding or even prior to a bankruptcy and seek termination of the pension plan so they can protect retirees from further risk and to capture pension plan assets (not all assets).
PBGC can and does also negotiate with plan sponsors to fund up a plan prior to approval of a spin-off of a pension plan that could be at-risk after a spin off. e.g. the Motorola spin off.
As the Avaya future plays out and to be kept informed during these uncertain times we recommend that If you are not already a member of the National Retiree Legislative Network and the Avaya Retirees Chapter that you sign up to gain access to our Avaya Chapter web site.
To sign up with the Avaya Chapter in the NRLN database by going to
http://www.nrln.org and click the sign up link at the top of the home page. After entering your contact information, scroll down and select the Avaya Retirees designation at the bottom of the drop down menu.
You need to know that the NRLN has made a commitment to work with the Avaya Retirees Chapter to help members stay informed and help understand their pension funding status and provide guidance just has it has done for other NRLN retiree groups who have encountered pension issues.
The NRLN Avaya Retirees Chapter affiliated with the NRLN earlier this this year.