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A&P reorganization filing opens window on benefit plans

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The Great Atlantic & Pacific Tea Company Inc. (A&P) and affiliates have given outsiders a peek into A&P benefits plans in a document included in a reorganization filing packet.

A&P and its affiliates submitted the document to the U.S. Bankruptcy Court for the Southern District of New York today in connection with the companies’ Chapter 11 reorganization filing.

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A&P managers say they have access to $100 million in debtor-in-possession financing they can use to restructure the company.

The supermarket chain has asked for court permission, “but not direction,” to pay prepetition wages and reimbursable employee expenses, pay and honor employee and medical benefits and other benefits, and continue employee benefits programs.

A&P says the company needs to continue the benefits programs to maintain morale and enhance the company’s ability to keep key employees.

The company has a total of 28,467 employees, including 8,718 full-time employees and 19,719 part-time employees. Unions represent about 93 percent of the employees through 35 collective bargaining agreements.

Unions that have collective bargaining units with A&P include the United Food and Commercial Workers International Union; the Retail, Wholesale and Department Store Union; the 1199 National Health and Human Services Employees Union; and the United Pharmacists’ Guild.

A&P pays 27,891 of the employees weekly and 576 every two weeks. The company pays about $14 million in gross payroll every two weeks.

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The company’s benefit plans include a medical plan, a prescription plan, a vision plan, life insurance, accidental death and dismemberment (AD&D) insurance, long-term disability (LTD) insurance and short-term disability (STD) insurance.

A&P is seeking bankruptcy court permission to continue to pay for the benefits programs it believes it needs to keep, and discretion to cut costs by changing or eliminating the benefits programs it wants to change or eliminate.

The main medical, prescription and dental plans are self-insured plans administered by Cigna Corp. (NYSE:CI).

A&P spends about $97,000 per month, after employee contributions, on medical claims; $335,000 on prescription claims; $83,000 on dental claims; $66,000 on medical and prescription administration fees; and $3,300 on dental administration fees.

The workers who have signed up for disability coverage pay for the coverage with their premiums. They are paying $49,000 per month for their LTD coverage and $7,000 for their STD coverage.

A&P withholds $44,000 for 420 employees who participate in its flexible spending account (FSA) program and has 5,837 current and former employees in its 401(k) plans.

A&P withholds $320,000 in employee contributions for the 401(k) per week and spends $55,000 per pay period on matching contributions. The employees themselves pay $17,000 for voluntary benefits from MetLife Inc. (NYSE:MET).

A&P spends $10.4 million per month on union funds that offer health, training and severance benefits, and the company says it wants court relief from some of the collective bargaining agreement benefits agreements related to that spending.

The company has been contributing $3.8 million per month to 12 national and local union pension plans and three single-employer pension plans.

See also: GAO Finds Dearth Of Bankruptcy Benefits Data