The Pension Benefit Guaranty Corporation approved a $43.1 million grant on Friday for the Kansas Construction Trades Open End Pension Trust Fund, a pension fund for construction workers based in Topeka, Kansas. The pension plan covers 8,145 participants and had been in critical status.
According to the plan’s Form 5500 from the end of 2022, the plan had 757 active participants, 2,298 participants that are retired and receiving benefits, 4,026 that are entitled to benefits in the future and 434 beneficiaries of deceased participants. The plan was 36.35% funded.
The special financial assistance provision of the American Rescue Plan Act of 2021 allows for PBGC funding for severely underfunded multiemployer pension plans. Grants are calculated to ensure plan solvency through 2051. The SFA program has paid out about $60.4 billion in grants.
Pension 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 Final Rule on Special Financial Assistance, issued in July 2022, states that the other third can be invested in “return-seeking investments,” such as stocks and stock funds.