The Retirement Fund of Local 305 CIO’s Pension Fund, a pension fund for workers in the service industry, received $36.3 million in special financial assistance from the Pension Benefit Guaranty Corporation today.
The Mineola, New York-based plan has 918 participants. The plan was projected to become insolvent in 2024, when benefits would have been cut by approximately 15%.
According to the fund’s Form 5500, the plan had seven active participants at the end of 2021. It also had 337 participants receiving benefits and another 541 entitled to benefits in the future. The plan first applied for the Special Financial Assistance Program in December 2022.
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.