Sears Wants More Time to Meet Federal Pension Requirements

New York City Sears Holdings chairman Eddie Lampert called on Congress to ease pension plan regulations in order to give companies additional time to make required cash contributions to make up losses caused by the current financial crisis.

In a letter to shareholders released Thursday, Lampert said that changes to regulations late last year meant Sears funding obligations in 2010 were going to increase by over $120 million.

Lampert detailed the growing pressures Sears will face this year from mandatory payments to its pension plan, following the steep decline in asset values seen last year. The retailer said that it had made cash contributions of $224 million to its pension plan in its financial year ending on Jan. 30, as it seeks to meet federal requirements to ensure that pensions are fully funded by 2011.

“We are not looking to decrease our obligation. We are simply looking for additional time to fund this obligation,” Lampert stated in his letter.

Lampert said regulators should grant employers an additional two years to amortize their losses from the market turmoil of 2007 and 2008, with only interest payments on cash pension obligations payable during the first two years.

Without assistance, Lampert said, “many of the country’s largest employers are being forced to make short-term trade-offs between maintaining employment and funding long-term obligations.”

Current legislation requires companies to make cash contributions to ensure their pension liabilities are 100 % covered by 2011.