The Pension Benefit Guaranty Corporation (PBGC) will pay retirement benefits for nearly 8,000 current and future retirees who participated in the Avaya, Inc. Pension Plan for Salaried Employees, according to a PBGC press release.
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Avaya, incorporated in 2000 when Lucent Technologies spun off its enterprise communications group, provides contact center and unified communications products and services worldwide. Avaya is headquartered in Santa Clara, California.
Avaya filed for Chapter 11 protection last January and is emerging from bankruptcy. The company asked the bankruptcy court to allow it to end its salaried plan. That motion was granted, and termination of the pension plan went into effect on November 30, 2017, the date proposed by Avaya in notices sent to participants.
The Avaya salaried plan is 63% funded, with plan assets of $1.6 billion and liabilities for future benefits of $2.5 billion, and thus is underfunded by $938 million. Benefit accruals under the plan have been frozen since 2003.
PBGC will pay pension benefits earned by retirees of Avaya’s salaried plan, up to the legal limits.
A separate plan, the Avaya, Inc. Pension Plan, which covers nearly 7,000 participants, remains ongoing and is sponsored by the reorganized Avaya.