The Graphic Communications National Pension Fund, formerly the GCC/IBT National Pension Fund, has agreed to a settlement to repay more than $8 million in excess funds it received under the Pension Benefit Guaranty Corporation’s Special Financial Assistance Program. The fund was also required to pay 2.25% in annual interest on that amount starting from May 14.
In April 2022, the PBGC approved the application submitted to the SFA program by the Carol Stream, Illinois-based pension fund, which covers 31,715 participants in the printing industry. Approximately $1.29 billion in special financial assistance was given to the plan, which had been projected to run out of money in 2022. In December 2022, the PBGC announced it would provide the fund with an additional $227.1 million, raising its total SFA distribution to the fund to more than $1.5 billion.
The PBGC said that without the SFA assistance, the plan would have been required to reduce its participants’ benefits to the PBGC guarantee levels if it became insolvent, which would have been approximately 15% below the benefits payable under the terms of the plan.
Under the terms of the SFA program, applicants are required to provide documentation of an independent death audit to identify deceased participants. The U.S. Department of Justice said that the Graphic Communications National Pension Fund’s census erroneously included approximately 371 deceased participants.
The error was spotted during an audit conducted by the PBGC’s Office of Inspector General, which determined that the $1.5 billion in funding was overstated by approximately $8 million. The Justice Department said the pension fund cooperated with its investigation and assisted with the actuarial analyses needed to calculate and validate the amount of the excess funds.
“I commend the NPF for its cooperation with the government’s efforts to identify and quantify excess SFA Program funds, as well as its prompt repayment,” Principal Deputy Assistant Attorney General Brian Boynton, head of the Department of Justice’s Civil Division said in a statement.
The PBGC added that it is working with other multiemployer pension plans to facilitate return of excess funds that were allotted based on inaccurate census data.
It is the second settlement involving a pension plan returning excess SFA funds received from the PBGC. In April, The Central States, Southeast and Southwest Areas Pension Plan reached a settlement with the Justice Department to repay approximately $126.6 million in overpayment the pension received from an assistance program. The fund was also required to pay 2.25% in annual interest.
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Tags: GCC/IBT National Pension Fund, Graphic Communications National Pension Fund, multiemployer plan, PBGC, Pension Benefit Guaranty Corporation, Pension Fund, SFA, Special Financial Assistance Program