SFA Update – Three More Approvals

The PBGC Special Financial Assistance program for troubled multiemployer plans approved three more plans for bailouts, and they went out of submission order for one.

The Detroit Newspaper Union Plan became insolvent in April 2019. At that time, PBGC started providing financial assistance to the plan. As required by law, the Detroit Newspaper Union Plan reduced participants’ benefits to the PBGC guarantee levels, which was roughly 35 percent below the benefits payable under the terms of the plan.  PBGC’s approval of the SFA application enables the plan to restore all benefit reductions caused by the plan’s insolvency and to make payments to retirees to cover prior benefit reductions. SFA will enable the plan to pay retirement benefits without reduction for many years into the future. The plan will receive $105.6 million in SFA, including interest to the expected date of payment to the plan.  “Without this Special Financial Assistance, these 563 Michigan printing industry workers would not receive the retirement benefits they have earned through years of hard work,” said U.S. Secretary of Labor Marty Walsh, chair of the Pension Benefit Guaranty Corporation’s Board of Directors. “With funding from President Biden’s American Rescue Plan, these workers now have the assurance of the secure retirement they deserve.”  In addition to the $105.6 million of SFA paid to the plan, PBGC’s Multiemployer Insurance Program will be repaid $13.4 million, which is the amount of the plan’s outstanding loans, including interest, for the financial assistance PBGC provided beginning in April 2019 and ending on the expected date of payment of SFA to the plan. 

The Local 617 Plan became insolvent in March 2020. At that time, PBGC started providing financial assistance to the plan. As required by law, the Local 617 Plan reduced participants’ benefits to the PBGC guarantee levels, which was roughly 65 percent below the benefits payable under the terms of the plan.  PBGC’s approval of the SFA application enables the plan to restore all benefit reductions caused by the plan’s insolvency and to make payments to retirees to cover prior benefit reductions. SFA will enable the plan to pay retirement benefits without reduction for many years into the future. The plan will receive $155.8 million in SFA, including interest to the expected date of payment to the plan.  “President Biden’s American Rescue Plan will deliver Special Financial Assistance to the Teamsters Local 617 Pension Plan that ensures the 891 New Jersey transportation workers and retirees covered by this plan will receive the retirement benefits they have earned,” said U.S. Secretary of Labor Marty Walsh, chair of the Pension Benefit Guaranty Corporation Board of Directors. “This assistance will deliver the secure retirement these workers were promised in return for many years of hard work.”  In addition to the $155.8 million of SFA paid to the plan, PBGC’s Multiemployer Insurance Program will be repaid $11.1 million, which is the amount of the plan’s outstanding loans, including interest, for the financial assistance PBGC provided beginning in March 2020 and ending on the expected date of payment of SFA to the plan. 

The GCU 2-C Plan became insolvent in January 2015. At that time, PBGC started providing financial assistance to the plan. As required by law, the GCU 2-C Plan reduced participants’ benefits to the PBGC guarantee levels, which was roughly 60 percent below the benefits payable under the terms of the plan.  PBGC’s approval of the SFA application enables the plan to restore all benefit reductions caused by the plan’s insolvency and to make payments to retirees to cover prior benefit reductions. SFA will enable the plan to pay retirement benefits without reduction for many years into the future. The plan will receive $40.8 million in SFA, including interest to the expected date of payment to the plan.  “Special Financial Assistance, funded by the American Rescue Plan, ensures the retirement these 535 printing industry workers were promised is delivered,” said U.S. Secretary of Labor Marty Walsh, chair of the Pension Benefit Guaranty Corporation Board of Directors. “Without this funding these workers would have continued to face diminished pension payments that threaten the secure retirement that they worked many years to earn.”  In addition to the $40.8 million of SFA paid to the plan, PBGC’s Multiemployer Insurance Program will be repaid $18.3 million, which is the amount of the plan’s outstanding loans, including interest, for the financial assistance PBGC provided beginning in January 2015 and ending on the expected date of payment of SFA to the plan. 

Our updated summary of the 35 plans in the system – 13 approvals and 22 under review:

One response to this post.

  1. […] The PBGC Special Financial Assistance program for troubled multiemployer plans weekend update showed one plan withdrawing in addition to the three approvals announced earlier in the week. […]

    Reply

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