Avaya Inc.’s recent deal to exit bankruptcy has put some of the telecom company’s pensioners at ease, but a small group stands to lose a significant portion of their retirement income, the Wall Street Journal reported today. Under a deal announced on Monday to bring Avaya out of chapter 11, benefit payments to nearly 8,000 participants in a legacy pension plan for salaried workers will be taken over by the Pension Benefit Guarantee Corp., the federal government’s retirement guarantor. For those retirees, not much would change if the deal wins court approval — they would begin receiving their monthly checks from the PBGC, the largest single creditor in Avaya’s bankruptcy, instead of the company itself. The PBGC guarantees pensions up to a certain amount depending on age; for a 65-year-old pensioner, that cap is $64,432 a year. Early analysis by the PBGC shows that 100 percent of those 8,000 retirees’ benefits are guaranteed by the agency. And payments to another 6,900 people in a separate plan covering hourly employees will remain the company’s responsibility after it surfaces from bankruptcy.
