The Pension Benefit Guaranty Corporation announced Wednesday its approval of the Legacy Plan of the Unite Here Retirement Fund’s application for special financial assistance. The PBGC will provide $868.6 million to the White Plains, New York-based plan.
The plan, which covers 91,744 participants in the hospitality industry, was expected to become insolvent in 2030. According to the plan’s Form 5500 for plan year 2023, the plan had a funded status of 29.8%.
Unite Here is a labor union which counts more than 300,000 members in the U.S. and Canada and represents workers in the hotel, casino, airports, food service, textile manufacturing and distribution, and transportation industries.
“With this Special Financial Assistance to the Legacy Plan of the UNITE HERE Retirement Fund, 91,744 UNITE HERE workers and retirees will have their pension benefits protected from expected future cuts,” Acting Secretary of Labor Julie Su said in a statement. “These workers are the backbone of our economy and deserve to retire with dignity.”
The Special Financial Assistance Program grants funding to underfunded and distressed pension funds that are nearing insolvency. As of January 15, the PBGC has provided $70.9 billion in special financial assistance to 109 pension funds covering more than 1.3 million retirees. The program was enacted in 2021 as part of the American Rescue Plan Act.
Plans that receive special financial assistance must allocate two-thirds of their assets to high quality fixed-income investments. Another one-third of assets can be invested in return-seeking assets like stocks and stock funds.
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Tags: Julie A. Su, PBGC, Pension Benefit Guaranty Corporation, Special Financial Assistance Program, UNITE HERE