The Pension Benefit Guaranty Corporation announced Monday three new recipients of funds under the Special Financial Assistance Program. Cincinnati-based Laborers Local No. 265 will receive $59.4 million; Teamsters Local 734, based in Chicago, will receive $99.7 million; and the Syracuse, New York-based International Union of Operating Engineers Upstate New York Engineer Pension Fund will receive $85.5 million from the PBGC under the SFA Program.
The SFA Program provides financial assistance to pension funds that are distressed and projected to become insolvent.
Laborers Local 265, with 1,460 participants in the construction industry, was projected to become insolvent in 2027. Teamsters Local 734, which covers 3,453 participants in the transportation industry, was projected to become insolvent in 2043. The IUOE plan, which covers 6,461 participants in the construction industry, was in critical status, meaning the plan has a funded status of less than 60%.
As of January 13, the PBGC has approved $70 billion in SFA funds for 108 pension funds, which in total cover 1.245 million beneficiaries, since the program was enacted in 2021 as part of the American Rescue Plan Act.
The PBGC requires at least two-thirds of special financial assistance funds to be invested in “high-quality fixed income investments,” according to the final rule on special financial assistance, issued in July 2022. The ruling also states that the other one-third of funds can be invested in “return-seeking investments” such as stocks and stock funds.
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Tags: PBGC, Pension Benefit Guaranty Corporation, SFA, Special Financial Assistance Program