Sears Pension: What Happened and What Retirees Get Now

Sears, once America's largest retailer, faced a slow decline:

• **2018:** Sears Holdings filed for Chapter 11 bankruptcy
• **2019:** Most stores closed; company assets liquidated
• **Pension plan:** Covered approximately 90,000 participants
• **Underfunded:** Plan didn't have enough assets to pay all benefits
• **Result:** PBGC stepped in as trustee

The Pension Benefit Guaranty Corporation protects workers when pensions fail:

• **PBGC is federal insurance:** Companies pay premiums; PBGC pays benefits if plans fail
• **Maximum benefit limits apply:** In 2026, about $6,750/month at age 65
• **Early retirement penalty:** Lower limits for those who retired before 65
• **Some benefits excluded:** Certain benefit increases in last 5 years, shutdown benefits
• **Process takes time:** Can take months to sort out exact benefits

The outcome varies by individual circumstances:

• **Most receive full benefits:** Average Sears pension was below PBGC limits
• **Higher earners may be cut:** Those with pensions above limits see reductions
• **Early retirees hit hardest:** Lower PBGC limits apply
• **Survivor benefits protected:** Spouses continue receiving benefits
• **Healthcare NOT included:** PBGC doesn't cover retiree health insurance

What you can learn from Sears retirees:

1. 1**Don't over-rely on company pension:** Diversify your retirement sources
2. 2**Watch for warning signs:** Declining revenues, store closures, credit downgrades
3. 3**Consider lump sum if offered:** Especially if company shows weakness
4. 4**Healthcare is separate:** Don't assume company health benefits will continue
5. 5**PBGC has limits:** If your pension exceeds limits, you're at risk
6. 6**Gold IRA as hedge:** Physical assets can't be reduced by corporate bankruptcy