The Pension Benefit Guaranty Corporation hit a milestone this week by approving its 100th application from a distressed pension plan through the Special Financial Assistance Program.
On Monday, the PBGC announced it will provide $41.5 million in financing assistance to the International Longshore and Warehouse Union Employers’ – Warehousemen’s Pension Plan, approving the plan’s application under the SFA Program.
The ILWU Employers’ – Warehousemen’s Plan was expected to become insolvent in 2037. The Los Angeles-based plan covers 1,821 participants in the manufacturing industry. Without special financial assistance, participants’ monthly benefits would have been reduced by 20%, beginning in 2037.
The PBGC grants financial assistance to distressed pension plans on the verge of insolvency through the SFA Program, which was enacted under the American Rescue Plan Act of 2021. Funds that receive money from the program are required to allocate at least-two thirds of provided money into “high-quality fixed income investments.” The other third can be invested in “return-seeking investments,” such as stocks, according to the SFA rules.
Since the inception of the SFA Program in 2022, the PBGC has provided special financial assistance to 100 plans with a combined 1.22 million participants and beneficiaries, according to the PBGC. It has approved a total of $69.5 billion in assistance through the program.
“This remarkable achievement means that families across America can rest easy knowing the dignified retirement they have worked so long for will be delivered,” said Acting Secretary of Labor Julie Su in a statement.
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Tags: ILWU Employers – Warehousemen's Pension Plan, PBGC, Pension Benefit Guaranty Corporation, SFA Program, Special Financial Assistance Program