SBC Holdings Pension Facts

This website provides information about The Stroh Companies, Inc.’s application with the Pension Benefit Guaranty Corp. to terminate the defined benefit pension plan for SBC Holdings, Inc.

Summary Background Information

The Stroh Companies, Inc., on Nov. 8, 2013 filed a formal application with the Pension Benefit Guaranty Corp. (PBGC) to terminate the defined benefit pension plan for SBC Holdings, Inc., which pays retirement benefits to former employees and their beneficiaries of The Stroh Brewery Co., which was sold nearly 15 years ago.

If the distress termination application is approved, the PBGC will assume benefit payments to the plan’s nearly 3,000 participants, who most likely should expect no reduction in benefit payments and full payment of all benefits to which they are entitled. In addition, there will be no interruptions in benefit payments to plan participants and beneficiaries as the PBGC considers the application. Again: benefit payments continue with no interruptions.

Because of years of historic low interest rates that have stressed public and private sector pension funds nationwide, The Stroh Companies can no longer afford to make payments to the plan to meet future obligations.

The Stroh Companies filed the application for two reasons:

  • To protect the retirement incomes of pension plan participants and their beneficiaries, and
  • To protect the financial viability of the company so it may continue to stay in business.

Toll-free help line:
1 (866) 277-2141

FOR IMMEDIATE RELEASE
Nov. 8, 2013

PBGC Asked to Assume Pension Plan for Employees of Old Stroh Brewery
Move Protects Plan Benefits and Financial Health of The Stroh Companies, Inc.

DETROIT — The Stroh Companies, Inc. today filed a formal application with the Pension Benefit Guaranty Corp. (PBGC) to terminate the defined benefit pension plan for SBC Holdings, Inc., which pays retirement benefits to former employees and their beneficiaries of The Stroh Brewery Co., which  was sold nearly 15 years ago.

Because of years of historic low interest rates that have stressed public and private sector pension funds nationwide, The Stroh Companies can no longer afford to make payments to the plan to meet future obligations.  If the “distress termination” application is approved, the PBGC will assume benefit payments to the plan’s nearly 3,000 participants. Also if the termination is approved, plan participants most likely will receive full payment of all benefits to which they are entitled under the plan. Benefit payments to plan participants will continue without interruption as the PBGC considers the application.

John W. Stroh III, Chairman of The Stroh Companies, Inc., said the action protects the retirement benefits of pension plan participants, nearly all of whom are former brewery employees and their beneficiaries, and the financial viability of the company.

“We are taking this action for two reasons: to protect the retirement incomes of pension plan participants and their beneficiaries, while also preserving the financial health of our businesses,” Stroh said. “We are taking this proactive action now to sustain the financial viability of the companies and to keep them in business, while protecting the retirement incomes of the pension plan’s participants.”

Stroh said it is “critically important” to note that The Stroh Companies today is a financially viable enterprise.

“This proactive move will head off significant financial difficulties for our company in the future,” Stroh said. “The financial fact is that because of nearly a decade of historically low interest rates, The Stroh Companies has been forced to liquidate assets to make the required payments to fund the plan, a negative financial trend that— should it continue — threatens the ability of The Stroh Companies to stay in business at some point in the future.”

While low interest rates benefit consumers and are good for government and corporate borrowing, they negatively affect the funding levels of pension funds.  Due to required actuarial assumptions, pension fund liabilities increase dramatically as a consequence of low interest rates, which in turn drive up the amount of required contributions.  Low interest rates are threatening the financial health of pension funds across the country. The Stroh Brewery Co. was sold in April 1999. There have been no new employees participating in nearly two decades.

In addition to filing the distress termination application with the PBGC, The Stroh Companies today mailed letters to all participants and beneficiaries covered by the plan notifying them of the application. A distress termination is available to financially distressed employers — The Stroh Companies, for example — that would be unable to stay in business at some point in the future if they must continue to fund the pension plan.

The PBGC is a federal agency created by the Employee Retirement Income Security Act of 1974 (“ERISA”) to protect pension benefits in private sector traditional pension plans known as defined benefit pension plans.  The SBC Holdings plan is a PBGC insured plan.  The PBGC’s financing comes from insurance premiums paid by companies whose plans the PBGC protects, from the assets of underfunded pension plans that the PBGC takes over, from financial recoveries from the companies formerly responsible for those plans, and from investment of these funds. The PBGC receives no taxpayer dollars.

Regulations limit the amount of the annual pension benefit payable by the PBGC to any participant in a plan assumed by the PBGC.  In the event the SBC Holdings’ plan is assumed by the PBGC, these limitations will not affect participants.  The plan’s actuary has advised The Stroh Companies, Inc., that all of the plan’s participants and beneficiaries can expect to receive the full benefits to which they are entitled.

The Stroh Brewery Co.’s roots in Michigan can be traced to 1850, when German immigrant Bernard Stroh arrived in Detroit and began brewing beer in the new Pilsner style. The B. Stroh Brewing Co. became Michigan’s largest brewer. In 1902, the company was renamed The Stroh Brewery Co., which was sold in its 150th year in business in 1999.

For more information about the application, The Stroh Companies, and the history of The Stroh Brewery Co., please visit www.SBCHoldingsPensionFacts.com. A toll-free help line has also been established for plan participants, 1 (866) 277-2141. Additional information about pension funds can also be found at www.pbgc.gov.

 

###

document-pdf

Download news release here.

Frequently Asked Questions (FAQs)

FAQ #1:  What is happening?

Answer:  The Plan Administrator for the SBC Holdings, Inc. Salaried Employees’ Pension Plan (the “Plan”) is submitting an application to the Pension Benefit Guaranty Corporation (the “PBGC”), which is an agency of the United States Government, to end the Plan under what is known as a “distress termination.”  The Plan is a defined benefit pension plan.  The legal term for ending the Plan is to “terminate” the Plan.  If the Plan terminates without having enough money to pay all promised benefits, the PBGC’s insurance program will pay you the benefit provided by the Plan up to the guarantee limits set by Federal law.

FAQ #2:  What is the Pension Benefit Guaranty Corporation (the “PBGC”)?

Answer:  The PBGC is a federal agency created by the Employee Retirement Income Security Act of 1974 (“ERISA”) to protect pension benefits in private sector traditional pension plans known as defined benefit pension plans.  The PBGC insures pension plans like ours.  The PBGC’s financing comes from a number of sources, including insurance premiums paid by companies like ours, whose plans the PBGC protects, from the assets of underfunded pension plans that the PBGC takes over, from financial recoveries from the companies formerly responsible for those plans, and from investment of these funds, but not from taxpayer dollars.  Most people receive from the PBGC the full benefit they earned before their pension plan terminates.  Although the PBGC ultimately decides whether participants and beneficiaries in underfunded terminated plans will receive their full benefits, the Plan’s actuary has advised The Stroh Companies, Inc., and members of its controlled group (the “Company”) that all of the Plan’s participants and beneficiaries can expect to receive the full benefits, in annuity form, that they have earned and are entitled to as of the Plan’s termination date.

FAQ #3:  How can the Company terminate the Plan?

Answer:  If the Plan does not have enough money to pay all pension benefits owed to participants, and the Company cannot afford to make further contributions to the Plan, then the Plan Administrator may apply to the PBGC for a distress termination of the Plan.  Generally, the PBGC cannot approve the application unless it is proven that because of the ongoing expense of the Plan, the Plan no longer is affordable and the Company at some point in the future will be unable to pay its bills and stay in business unless the Plan is terminated.  If the application is approved, the PBGC will take over as trustee of the Plan and then pay benefits to participants and beneficiaries, up to the legal limits, using Plan assets and PBGC insurance funds.

FAQ #4 :  Will my benefit decrease as a result of the termination?

Answer:  The Plan Administrator has been advised by the Plan’s enrolled actuary that he believes the answer is no, because the level of benefits for each of the participants and beneficiaries most likely does not exceed the guarantee limits under Federal pension insurance law.  All participants and beneficiaries can expect to receive from the PBGC, as a guaranteed benefit, the full annuity benefit they are currently receiving or currently entitled to receive (whether now or in the future) under the Plan.  Benefit payments will continue uninterrupted while the PBGC is reviewing the distress termination application.

The PBGC ultimately is responsible for determining the appropriate amount of a participant’s or beneficiary’s benefits under terminated pension plans that the PBGC takes over.

FAQ #5:  What can the PBGC tell me about my pension?

Answer:  If you are a participant in a pension plan that the PBGC insures but that has not yet been taken over (“trusteed”), which at this time is the case here, the PBGC will not yet have any specific information about you or your benefit under your plan.  Generally, the PBGC obtains most of this information after the PBGC trustees the plan.  This means that if you look on the PBGC’s website (www.pbgc.gov), you will find information about the PBGC’s insurance program and how the PBGC operates, including the ERISA insurance guarantee, which these FAQs also briefly describe.  As explained above, the Plan Administrator of the Plan is applying to have the Plan terminated and trusteed in what is known as a “distress termination.”  If the application is approved, the PBGC will obtain and review the Company’s records about all participants’ benefits under the Plan, which usually takes several months, and then will write to you directly about your benefit.

FAQ #6:  What happens when the PBGC takes over as trustee of a pension plan?

Answer:  The PBGC reviews the plan’s records to determine the benefits that each participant or beneficiary may receive.  The amount of a benefit cannot be greater than limits set by law.  If you already are receiving your pension, the PBGC will continue paying your benefit without interruption during the review.  The payments, which are estimates of the amounts of the benefits that the PBGC can pay under the ERISA insurance program, usually are in the same amount that you already are receiving, and will be paid in the annuity form you chose at retirement.

If you have not yet retired, the PBGC will pay you an estimated benefit when you become eligible to receive your pension and apply to the PBGC to begin receiving your benefit payments.  The PBGC will offer you the opportunity to select from several forms of benefits, some of which may be different from what the Plan offers.  This estimated benefit usually is in the same amount that the Plan would have paid.

After the PBGC completes an in depth review of all plan benefits for accuracy, you will be sent a letter that is called a “benefit determination” of your final benefit amount.  For most people, benefit amounts will not change. You may appeal your benefit determination to the PBGC Appeals Board if you believe it is incorrect. Appeal rights also are communicated in writing.

FAQ #7:  How is the PBGC’s final determination of my benefit implemented?

Answer:  If your estimated benefit has been lower than the amount that the PBGC determines you should be receiving, the PBGC will make up the difference in a single payment, with interest.  If your estimated benefit has been higher than the amount that the PBGC determines you should have been receiving, your future monthly payments will be adjusted to the final amount calculated by the PBGC, generally reduced by no more than ten percent each month to account for the higher payment already received, without interest, until the overpayment is recovered.  This is called “recoupment.”  However, most of the time there are no adjustments to benefit payments.

FAQ #8:  What benefits does the PBGC guarantee?

Answer:  The PBGC guarantees “basic pension benefits,” subject to legal guarantee limits.  These include:

-          pension benefits at normal retirement age;

-          most early retirement benefits;

-          disability benefits for disability before termination of the plan; and

-          certain benefits for survivors of plan participants.

The PBGC’s guarantee applies only to benefits earned before a plan terminates.  The PBGC does not guarantee health and welfare benefits, vacation pay, or severance pay.

FAQ #9:  What is the maximum amount that the PBGC can guarantee by law?

Answer:  The PBGC’s maximum benefit guarantee is set each year under the provisions of ERISA.  The maximum guarantee applicable to a plan is fixed as of the plan’s termination date.  For 2013, the maximum guaranteed amount is $4,789.77 per month ($57,477.24 per year) for participants who begin receiving payments from the PBGC at age 65.  The maximum guaranty is lower if you begin receiving payments from the PBGC before age 65 or if your pension includes payments for a survivor or other beneficiary.  The maximum guarantee is higher if you are over age 65 when you begin receiving benefits from the PBGC.  The maximum guaranteed benefit is based on your age on the date when you begin receiving a benefit payment from the PBGC.  The Plan may terminate during 2014.  The PBGC has not yet released information concerning the maximum guaranteed benefit for 2014.

FAQ #10:  Am I vested in the Plan?

Answer:  For most participants, vesting in the Plan occurred after five full years of employment.  Based on information supplied by the Plan’s actuary, and subject to the PBGC’s review of relevant Plan and Company records, all participants and beneficiaries under the Plan have a fully vested benefit

FAQ #11:  Can I earn additional benefits after the Plan’s termination date?

Answer:  No, you cannot earn additional benefits after the Plan terminates.  As you know, there have been no benefit accruals under the Plan for many years.  Benefit accruals under the Plan ceased as of March 31, 1994, in accordance with Section 204(h) of the Employee Retirement Income Security Act (“ERISA”). For employees covered by the Heileman Salaried Employees’ Pension Plan, which was merged into the Plan effective December 31, 1996, benefit accruals had previously ceased as of June 30, 1996, in accordance with Section 204(h) of ERISA.

FAQ #12: What forms of benefit will the PBGC pay?

Answer:  If you are already retired when the PBGC takes over the Plan, the PBGC will continue to pay your benefit in the form that you chose at retirement.

If you retire after PBGC takes over the Plan, you may elect to receive your benefits in one of the following ways:

  • A straight-life annuity that provides you with fixed monthly benefit payments for your lifetime.  No survivor benefit will be paid after your death.
  • A 5-year, 10-year or 15-year certain-and-continuous annuity that provides you with fixed monthly benefit payments for your lifetime. If you elect this type of life annuity and die before the end of the 5-, 10- or 15-year time period you selected, your designated beneficiary will receive the same monthly benefit for the remainder of the period. If you die after the end of the period, benefit payments end upon your death.
  • A joint-and-survivor annuity that provides you with fixed monthly benefit payments for your lifetime and, upon your death, continues payments to your spouse or other beneficiary for the rest of his or her life. The monthly benefit your spouse or other beneficiary receives is 50, 75 or 100 percent — depending on your choice — of the amount you were receiving while you were alive. If your beneficiary dies before you, your monthly benefit will not change.
  • A joint-and-50% survivor “pop-up” annuity that differs from the joint-and-survivor annuity described above in that, if your spouse or other beneficiary dies before you, your monthly benefit “pops-up” to the straight-life annuity amount for the rest of your life.
  • The “automatic” form of benefit provided to you under the Plan (i.e., for a married participant, a “Joint & 50″ Survivor Annuity, and for an unmarried participant, a Life Annuity).

If you are married when your benefit payments begin, your spouse must provide written consent for you to elect any form of benefit other than the automatic form that the Plan would pay to a married participant.

A Qualified Domestic Relations Order (“QDRO”) also may affect benefit payments.

FAQ #13:  Will I be eligible for early retirement benefits?

Answer:  The Plan’s normal retirement age is age 65.  Under the various early retirement provisions of the Plan, most participants may begin receiving an actuarially reduced benefit at age 55 if they have met a service requirement 10 years of vesting service.  If you have already met the age and vesting service requirements for an early retirement benefit as of the date of the Plan’s termination, you will be eligible for an early retirement benefit from the PBGC.

FAQ #14:  Does the PBGC pay survivor benefits?

Answer:  Yes.  If you retired before the Plan terminates, the PBGC will pay benefits to your surviving beneficiary if you elected a benefit form that provides survivor benefits.  If you chose an annuity that pays benefits for the life of your beneficiary, such as a joint and survivor annuity, the PBGC will pay these benefits only to the beneficiary you chose when you retired.  If you chose an annuity that pays your beneficiary only for a fixed period, such as a certain and continuous annuity, the PBGC will pay any remaining benefits to your most recently named beneficiary.

The PBGC allows all future retirees, whether or not married, to elect a benefit form that provides survivor benefits and to name a beneficiary at that time.

If you die before retiring but after the Plan is terminated, the PBGC will pay your spouse a survivor benefit.

A Qualified Domestic Relations Order (“QDRO”) also may affect benefit payments.

FAQ #15:  Can I receive my benefit from the Plan or the PBGC in a lump sum?

Answer:  After the issuance of the enclosed Notice of Intent to Terminate, which now has occurred, the PBGC’s regulations prohibit the Plan from paying benefits in the form of a lump sum, which is a single, one-time payment.  After trusteeship of the Plan, the PBGC normally pays benefits in monthly payments in annuity form, for life, rather than as a lump sum.  If the PBGC determines that the total value of your benefit is $5,000 or less, following trusteeship of the Plan, you may receive your benefit in a lump sum.

FAQ #16:  Can I put my lump sum into an Individual Retirement Arrangement (“IRA”)?

Answer:  Yes, most traditional IRAs or other qualified retirement plans will accept a lump-sum payment from the PBGC.  See also FAQ #15.  If you direct the PBGC to pay the lump sum directly to your IRA or other plan, the PBGC will not withhold income tax from the payment.  With this type of payment, known as a “tax free rollover,” you will not have to pay income tax until you receive payments from the IRA or other plan.

FAQ #17:  Will the PBGC adjust my pension yearly for inflation?

Answer:  No, the PBGC does not guarantee or pay cost of living adjustments after a plan terminates, and there is no cost of living adjustment to PBGC benefits under the law.

FAQ #18:  What is the HCTC?

Answer:  The HCTC is a government program that is administered by the Internal Revenue Service.  The HCTC makes health insurance more affordable for certain PBGC payees over age 55 and their families.  For example, the HCTC currently covers 72.5 percent of health insurance premiums.  If you qualify for the HCTC, the HCTC is available on a monthly basis to help you make ongoing payments for your health insurance, or on a yearly basis when you file your federal tax return.

Once the Plan is terminated and taken over by the PBGC, if you are at least 55 years of age, are receiving a pension benefit from your participation in the Plan, and register for the monthly program, you will pay your portion of your premium (currently 27.5 percent), the government agency HCTC Program will pay its portion of the premium (currently 72.5 percent), and the government agency HCTC Program will send the full 100 percent to your health plan for you.  The HCTC is a refundable tax credit.  It is paid in full no matter how much federal income tax a recipient owes.  The PBGC’s national office in Washington, D.C. notifies the HCTC Program of an individual’s eligibility.  More information about the HCTC program can be found on the PBGC’s website at www.pbgc.gov/wr/benefits/hctc.html.

FAQ #19:  How soon after a pension plan is taken over by the PBGC can an individual claim the monthly or yearly HCTC?

Answer:  As long as the individual is enrolled in a qualified health plan for that month, the first month that an individual can claim the yearly HCTC on his or her federal tax return is the month of the PBGC’s official trusteeship of the pension plan.  For example, if the PBGC trustees a plan on March 31, the individual can claim the credit for all of March.  An individual can register for the monthly HCTC as soon as he or she receives the HCTC Program kit in the mail, which is after the PBGC sends eligibility records to the HCTC Program via a secure electronic file transfer.  If the individual is enrolled in a qualified health plan for months prior to receiving the first monthly credit for the HCTC, the individual can claim the yearly HCTC for those months on his or her federal tax return.

FAQ #20:  Can I request a benefit estimate?

Answer:  Until the PBGC becomes trustee of the Plan, you may request an estimate of your benefit from Mercer, the Plan’s Third Party Benefits Administrator.  Mercer can be contacted toll free at 1 (866) 277-2141, which is the Stroh Pension Plan Helpline.  After the PBGC becomes trustee of the Plan, you will receive a letter from the PBGC that will contain information on how to obtain an estimate of your benefit.

FAQ #21:  What is the Notice to Interested Parties?

The Notice to Interested Parties lets you know that the Plan Administrator will also be submitting the Plan to the Internal Revenue Service for review that as terminated, the Plan satisfies all of the applicable tax-qualification provisions of the Internal Revenue Code.  The Internal Revenue Service’s review is separate from the PBGC’s review of the distress termination application.

 

document-pdf

Download Frequently Asked Questions (FAQs) here.

MEMORANDUM

Date:  November 8, 2013

To:  Participants and Beneficiaries of Deceased Participants in the SBC Holdings, Inc.,
Salaried Employees’ Pension Plan

From:  John W. Stroh, III, Chairman, Plan Administrative Committee for the SBC Holdings, Inc.
Salaried Employees’ Pension Plan

Subject: Notice of Pension Plan Changes

As Chairman of the Plan Administrative Committee (the “Plan Administrator”) for the SBC Holdings, Inc., Salaried Employees’ Pension Plan (the “Plan”), I am writing to let you know about important changes to the Plan.  These changes are designed to ensure that participants and beneficiaries receive the full amount of the post-retirement benefits to which they are entitled under the Plan.

Although there are currently sufficient assets in the Plan to meet present and foreseeable pension payments for a number of years, The Stroh Companies, Inc., which is the contributing sponsor of the Plan, and its subsidiaries (the “Company”), is much smaller than during the years in which the Stroh enterprise owned and operated the brewery business, and cannot continue to fund the Plan.  The Company has determined that the continued funding requirements for the Plan have become unsustainable, and it is now essential that we deal proactively with this issue. Historically low interest rates (which result in larger pension liabilities) and increasing costs of administering the Plan are impacting the Company’s ability to continue to fund the cost of the past accrual of pension benefits. The Company could not afford to make the contribution to the Plan that was due on October 15, 2013 and does not expect that it will be able to afford to make future contributions to the Plan.

For these reasons, the Company has decided that an application should be submitted by the Plan Administrator to the Pension Benefit Guaranty Corporation (the “PBGC”), an agency of the United States Government, to end the Plan, through what is known legally as a “distress termination” of the Plan, effective January 12, 2014.  The PBGC insures the Plan’s benefits up to legal limits.  If the PBGC approves the request, the PBGC will take over responsibility for the Plan by becoming the Plan’s trustee, and will pay benefits in annuity form, under the Plan up to those legal limits.

Most people receive the full benefits they earned before their pension plan terminates.  Although the PBGC ultimately decides whether participants and beneficiaries in underfunded terminated plans will receive their full benefits, the Plan’s actuary has advised the Plan Administrator that all of the Plan’s participants and beneficiaries who are entitled to plan benefits when the Plan terminates will most likely receive them in annuity form, in full, from the PBGC.  However, generally, a participant who is not  yet receiving a pension will not be entitled to early retirement benefits unless he or she has attained age 55 with ten years of service by the plan termination date, which can be no earlier than 60 days following the date of this mailing.  Please review the enclosed Notice of Intent to Terminate and the Frequently Asked Questions (“FAQs”) for additional information. The PBGC will make the final determination of your guaranteed benefit amount.

As you know, there have been no benefit accruals under the Plan for many years.  Benefit accruals under the Plan ceased as of March 31, 1994, in accordance with Section 204(h) of the Employee Retirement Income Security Act (“ERISA”).  For employees covered by the Heileman Salaried Employees’ Pension Plan, which was merged into the Plan effective December 31, 1996, benefit accruals had previously ceased as of June 30, 1996, in accordance with Section 204(h) of ERISA.

Please note that if the Plan is terminated and trusteed by the PBGC, retirees age 55 and older may be able to receive the Health Coverage Tax Credit (“HCTC”) to cover 72.5 percent of the cost of their monthly health care premiums.  Details about the HCTC, and other details concerning the PBGC and the distress termination process, are contained in the enclosed FAQs.  I urge you to read the FAQs carefully, as they provide important information that may address most, if not all, of your concerns.  Additional information about the HCTC, PBGC benefits, and other related issues is available on the PBGC’s website, at www.pbgc.gov.  Additional information concerning the distress termination can be obtained at www.SBCHoldingsPensionFacts.com.

The enclosed Notice of Intent to Terminate the Plan also provides you with important information about the proposed distress termination of the Plan.  I urge you to read this notice carefully.  Also enclosed is a Notice to Interested Parties which informs you that the Plan will be submitted to the Internal Revenue Service for its review with respect to the Plan at its termination.

If, after reviewing the Notice of Intent to Terminate, this Memorandum, the FAQs, and the Notice to Interested Parties, you have any other questions, please contact us through Mercer, the Plan’s Third Party Benefits Administrator, at the Stroh Pension Plan Helpline, toll free at 1 (866) 277-2141, who will arrange to have your questions answered.

Enclosures:
Notice of Intent to Terminate
Frequently Asked Questions
Notice to Interested Parties

 

document-pdf

Download full document here.

November 8, 2013


NOTICE OF INTENT TO TERMINATE
SBC HOLDINGS, INC. SALARIED EMPLOYEES’ PENSION PLAN

The Stroh Companies, Inc. (the “Company”) intends to terminate the SBC Holdings, Inc. Salaried Employees’ Pension Plan (the “Plan”) in a distress termination. The law requires that we provide you with written notice of the proposed termination. If the proposed termination does not occur, the Plan Administrator will notify you in writing.

NAME AND EIN OF EACH CONTRIBUTING SPONSOR:

The Stroh Companies, Inc., EIN: 38-2288978.

PROPOSED PLAN TERMINATION DATE:

January 12, 2014.  We will notify you if the proposed termination date is changed to a later date.

CONTACT PERSON:

If you have any questions concerning the plan’s termination, contact:

Mercer (the Plan’s Third Party Benefits Administrator)

Telephone:  The Stroh Pension Plan Helpline, 1 (866) 277-2141 (toll free)

You also may obtain information concerning the Plan’s termination at www.SBCHoldingsPensionFacts.com

CESSATION OF ACCRUALS:

Benefit accruals under the Plan ceased as of March 31, 1994, in accordance with Section 204(h) of the Employee Retirement Income Security Act (“ERISA”).  For employees covered by the Heileman Salaried Employees’ Pension Plan, which was merged into the Plan effective December 31, 1996, benefit accruals had previously ceased as of June 30, 1996, in accordance with Section 204(h) of ERISA.

OBTAINING A SUMMARY PLAN DESCRIPTION:

If you wish to obtain a copy of the summary plan description (“SPD”) for the Plan, you may call or send an email using the contact information listed above.  The SPD also is available on the website address listed above.

PLAN FUNDING LEVEL:

Although there are sufficient funds in the Plan to meet present and foreseeable pension payments for a number of years, the Plan does not have sufficient funds to pay all promised benefits.  The Company was not able to afford to make the contribution to the Plan that was due on October 15, 15, 2013, and does not expect to have the resources to satisfy contribution requirements going forward.

The Pension Benefit Guaranty Corporation (the “PBGC’), a federal government agency, will assure that you receive pension benefits that are guaranteed by law.

BENEFITS GUARANTEED BY PBGC:

The PBGC pays most people all pension benefits, but some people may lose certain benefits that are not guaranteed.

1.  The maximum guaranteed benefit that the PBGC can pay is set by law each year.  For pension     plans terminating in 2013, for ex­ample, the maximum guaranteed amount is $4,789.77 per month ($57,477.24 per year) for a worker who retires at age 65 with a straight life annuity.  The Plan may terminate with a 2014 termination date.  The PBGC has not yet released information concerning the amount of the maximum guaranteed benefit for 2014.

-          The maximum guaranteed benefit will be reduced for an individual who begins receiving payments from PBGC before age 65.  Age is determined as of the Plan’s termination date for current retirees.

-          The maximum guaranteed benefit also will be reduced if a pension is paid in a form that includes benefits for a survivor or other beneficiary.

-          The maximum guarantee is higher if you are over age 65 when you begin receiving benefits from the PBGC.

2.  The PBGC does not guarantee benefits that are not vested when a plan terminates, usually because the individual has not worked enough years for the company.

3.  The PBGC does not guarantee benefits for which an individual has not met all age, service, or other requirements at the time the plan terminates.  A participant generally will not be entitled to early retirement benefits unless he or she has attained age 55 with ten years of service by the Plan Termination Date.

4.  Benefits other than pension benefits, such as health insurance, life insurance, certain death benefits, vacation pay, or severance pay are not guaranteed.  The PBGC does guarantee pre-retirement survivor annuity benefits for spouses when a participant’s death occurs on or after the Plan’s termination date.  Cost of living adjustments are not guaranteed.

5.  The PBGC generally does not pay lump sums exceeding $5,000, as determined by the PBGC’s rules for valuing benefits.

6.  The PBGC does not guarantee disability benefits unless the disability occurred before the termination of the Plan.

7.  The PBGC may recoup any post-termination pension payments that exceed the PBGC’s guarantee.

Most people receive the full benefits they earned before their pension plan terminates.  Although the PBGC ultimately decides whether participants and beneficiaries in underfunded terminated plans will receive their full benefits, the Plan’s actuary has advised the Company that all of the Plan’s participants and beneficiaries who are entitled to post-retirement plan benefits when the Plan terminates will most likely receive them in annuity form, in full, from the PBGC.  The PBGC will make the final determination of your guaranteed benefit amount.
document-pdf

Download full document here.

A Brief History of The Stroh Brewery Company

In 1850, German immigrant Bernard Stroh arrived in Detroit and began brewing beer in the new Pilsner style.  Over the next decades, this beer style supplanted the traditional English style ales and porters to become the dominant beer style in Michigan and much of the rest of America.  The B. Stroh Brewing Company prospered and rapidly grew to become the largest brewery in Michigan.

In 1902, the company was renamed The Stroh Brewery Company under the ownership and management of brothers Bernard Stroh Jr. and Julius Stroh.  In 1914, the brothers built a new facility to replace the original 1868 brewery and incorporated the “fire-brewing” process for which Stroh would become known.  Two years later Bernard Stroh Jr. died and on the eve of the passage of prohibition in Michigan, Julius Stroh bought the shares owned by his brother’s estate, becoming the 91% owner of the company in 1917 with his sister Nellie and certain senior employees or their descendants making up the remainder.

With the onset of prohibition in January 1918, the company converted operations to the production of soft drinks, ice cream and de-alcoholized beer, known as “near beer.”

During the 1930s, while Julius Stroh transferred much of his ownership to his two sons and three daughters, significant capital investment was made to expand the plant.  The remnants of the 1868 buildings were demolished to make way for expanded stock cellars, which increased annual capacity to more than 1 million barrels.  After Julius’s death in 1939, and through the 1940s, competition and wartime rationing of raw materials held sales levels well under capacity.  A major new packaging facility and new additions to the stock cellars were completed just after the death of successor President Gari Stroh in 1950, setting the stage for future growth under the leadership of his brother John.

The 1950s saw the company’s fortunes rise as sales growth and gradual geographic expansion took Stroh from a mid-sized, regional player with markets in Michigan, Ohio and Indiana, to a large super-regional brewer with sales of 2.7 million barrels across eight states.  This growth trajectory was abruptly cut short by a six-week strike in 1958, after which Stroh’s national ranking of 10th place in the industry dropped to 15th, and previously achieved sales levels were not reached again until 1968.  With gradual geographic expansion to 15 states, Stroh’s sales reached the celebrated milestone of 5 million barrels by 1975.  It was during this period that the transition between the third generation of family management and the fourth was begun.  Peter Stroh, a son of the late Gari M. Stroh, was elected President in 1968, and John W. Stroh, who had begun his full-time career with the Company in 1913, remained Chief Executive Officer and became Chairman of the Board.

By the 1970s, it was apparent that demographic and competitive factors were closing in on Stroh.  In 1978, the sales milestone of 6 million barrels was not celebrated.  The company, trapped in its slow growth, Midwestern geography, was outflanked by larger national competitors like Anheuser-Busch, Schlitz, Miller, Pabst and Coors, each of which had been expanding rapidly throughout the 1950s and 1960s in the high-growth Southern and Western markets, and by other regional competitors like G. Heileman, which had been growing through acquisition.  Stroh’s increase in national ranking was due less to its own modest sales growth than to the declines of weaker national and super regional competitors such as Falstaff and Carling, Blatz, Hamm’s, Schaefer and Ballantine.

By 1979, it was decided that, in the words of Peter Stroh, “Stroh must grow, or go.”  Consolidation and acquisitions were occurring across the second and third tiers of the industry.  While market leader Anheuser-Busch and fast growing Miller (by then a division of tobacco giant Philip Morris) fought for dominance as the introduction of the low-calorie beer category caused significant changes in the competitive landscape, the once great Jos. Schlitz Brewing Company was faltering under the weight of product quality and marketing and management failures.  Stroh completed the acquisition of the F & M Schaefer Brewing Company in 1981, while adding fire-brewing capability to the Schaefer Allentown plant to enable the expansion of the Stroh brand into Eastern markets.  Stroh’s beer volume reached 9 million barrels in 1981.

In 1982, Stroh made a successful debt-financed bid to acquire Schlitz.  The acquisition catapulted Stroh into third place nationally, with sales of nearly 23 million barrels and seven breweries across the country.  The Stroh’s brand was rolled out into national distribution utilizing the Schlitz plant and distributor network.  This expansion of the Stroh’s brand geography slightly offset the decline of the Schlitz and Schaefer brands, but corporate sales began to decline after reaching a peak of nearly 25 million barrels in 1984.

The financial strain of the Schlitz acquisition and difficulties managing the complex brand portfolio in a brutally competitive environment led to the difficult decision to close the Detroit brewery.  The negative impact of the plant closure was offset by a short-lived boost in profitability, but by 1989, Stroh was in trouble with its lenders.  A two-year long restructuring began with an ultimately aborted attempt to sell the entire company to Coors, and culminated with the sale of Stroh’s 33% interest in a Spanish brewing company, La Cruz del Campo, that had been originally acquired along with Schlitz, allowing for all acquisition indebtedness to be extinguished.  The competitive background of the industry remained unchanged, but Stroh was able to remain profitable and debt-free, in an environment in which it was losing market share and having to close breweries to better match capacity with sales.  By the mid-1990s, annual sales were down to 14 million barrels.

In 1996, Stroh acquired Heileman in a leveraged transaction.  Heileman brought still more production complexity and brand proliferation that proved difficult for the company to manage profitably.  When Pabst, backed by Miller Brewing Company, offered to purchase The Stroh Brewery Company in late 1999, Stroh shareholders agreed to exit the brewing business in the enterprise’s 150th year of operation.

The Stroh Brewery Company closed, as scheduled, at the end of April 1999, and the name of the company was changed to SBC Holdings, Inc.

 

 

Notice to Interested Parties

document-pdf

Download here.

Summary of SBC Holding’s Inc. Salaried Employees’ Pension Plan