The Pension Benefit Guaranty Corporation granted $49.3 million in special financial assistance to the Local 210’s Pension Plan, a transportation industry multiemployer plan based in New York City.
The plan covers 3,887 participants. It was projected to become insolvent in 2026, when it would have had to cut benefits by 10%.
According to the pension fund’s Form 5500 from 2022, the Local 210’s Pension Plan had, as of the end of 2022, 559 active participants, 1,552 participants who are retired and receiving benefits, and 1,557 inactive participants entitled to benefits in the future. The plan had about $20.8 million in assets under management and was 15.92% funded.
The SFA 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 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.
Tags: PBGC, SFA, Special Financial Assistance