The Pension Benefit Guaranty Corporation granted $16 million in special financial assistance to the Laborers’ International Union of North America Local Union No. 1822 Pension Fund.
Local 1822 is a Syracuse, New York-based pension fund with 525 participants from the construction industry. The fund was in critical status but was not yet insolvent or behind on payments. According to its Form 5500, the fund was 30.25% funded at the end of 2022.
The plan had 120 active members at the end of 2022, 226 receiving benefits and 116 entitled to benefits in the future.
The special financial assistance provision of the American Rescue Plan Act allows for PBGC funding for severely underfunded multiemployer pension plans. Funds that receive assistance must monitor the interest resulting from the grant money as separate from other sources of funding. The PBGC requires that at least two-thirds of the money it provides be invested in “high-quality fixed income investments.”
The PBGC’s final rule on special financial assistance, issued in July 2022, states that the other one-third can be invested in “return-seeking investments,” such as stocks and stock funds.