The Boyd pension has 249 participants.

A federal agency is seeking to take control of the Boyd Coffee Co. employee pension, claiming it is $8 million underfunded and that the now-defunct company “is financially unable to keep up the plan.”

Boyd needs $17 million to shore up the plan, according to information provided by the Pension Benefit Guaranty Corp., the nation’s insurer of pension benefits. But it has just $9 million in assets.

The Boyd pension has 249 participants.

Boyd Coffee Co. shuttered operations in 2018 in Portland and Eugene and laid off 230 people, including 135 in Oregon. IN 2017, Boyd sold to a Texas coffee roaster, Farmer Bros., for $58.6 million. Farmer Bros. Co. did not acquire the pension plan.

“At that point, it’s what we call an orphan plan,” said Dan Feinberg, a lawyer and pension law expert based in Oakland, California. “Farmer didn’t buy it. It looks to me like no one is putting additional funds into the plan.”

The Boyd pension plan’s annual report to the IRS, known as a Form 5500, indicates that it did not make any contribution to the plan in 2019 or 2020. The minimum contribution required by federal law in that time was $1.3 million, according to the report. Pension rules allowed Boyd to satisfy the funding requirement by applying for credit for past contributions that exceeded the required minimum.

Boyd officials could not be reached for comment. Calls and emails to what’s left of Boyd and to Farmer Bros. were not returned.

The Pension Benefit Guaranty Corp. declined an on-the-record interview but agreed to provide some information in written statements. The agency issued public notice of the looming change in an ad in The Oregonian.

Traditional pensions, which pay qualified retirees a set amount per month for the rest of their lives, have become a dinosaur in the private-sector retirement world. Instead, companies have moved to 401(k)s and other types of plans funded primarily by employees.

Critics argue that this transition has contributed to widespread retirement insecurity. Defined-contribution plans like the 401(k) shift the risk from employers to employees.

Congress created the Pension Benefit Guaranty Corp. in 1973 to protect workers if their employer walks away from its retirement promises. It is essentially an insurer of promised benefits, akin to the way the Federal Deposit Insurance Corp. insures bank deposits.

Nationwide, the pension agency is paying benefits to 900,000 people from nearly 5,000 terminated or abandoned corporate pension plans.

The situation at Boyd could have been worse. The company’s prior owners agreed to use a significant portion of the $58 million purchase price paid by Farmer Bros. to strengthen the pension fund.

But the Boyd entity left to oversee the pension is a shell. The coffee company that generated revenue had been sold off.

“PBGC is taking this action because your plan meets the criteria for termination under federal pension law,” the federal agency said in a public announcement to employees. “In general that means that the plan doesn’t have enough money to pay all the promised benefits.”

Hundreds of Oregon companies have frozen their pension plans. Boyd froze its plan in 2007. These companies remain responsible for paying the pension benefits already earned by plan participants. But employees no longer accrue any pension benefit going forward.

About 25 Oregon companies have simply terminated their plans, which has forced the pension agency to step in. Many of the companies were small and obscure. Others were big names.

* Sporting goods retailer G.I. Joe’s terminated its plan in 2011, affecting 479 workers.

Timber company Pope & Talbot Inc. terminated a pension plan in 2008 that included 1,187 participants.

Mail-order fruit operation Harry & David ended its plan after filing bankruptcy in 2011, leaving nearly 2,300 employees in the lurch.

Most recently, Stayton-based vegetable processing firm Norpac Foods dumped its pension in 2019, which counted 538 participants.

The pension agency assumed the obligations of all four, it said.