PBGC Grants $31.6M to Newspaper Drivers Pension Plan

The Pension Benefit Guaranty Corporation has approved $31.6 million in Special Financial Assistance Program funds for the Retirement Benefit Plan of the Newspaper and Magazine Drivers, Chauffeurs and Handlers Union Local 473, an Ohio-based pension fund with 804 participants.

The fund was expected to become insolvent in 2034. According to its Form 5500, the plan had $49 million in assets and a funded status of 79% as of 2022, the last available plan year.

The Local 473 plan, at risk of insolvency, applied for special financial assistance to avoid having to reduce participants’ benefits levels to the PBGC guarantee level upon insolvency of the plan.

“Many Americans have worked for decades toward the promise of a well-earned retirement after a lifetime of hard work,” said Julie Su, Acting Secretary of Labor, in a statement announcing the grant. “Today, the Biden-Harris Administration is delivering on that promise for the workers of Local 473 by providing Special Financial Assistance under the American Rescue Plan to ensure that they can retire with the dignity they deserve.”

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The Special Financial Assistance Program, enacted as a part of the American Rescue Plan in 2021, provides crucial funding to underfunded multiemployer pension plans at risk of insolvency.

As of August 16, the PBGC has approved $67.7 billion in funds through the Special Finance Assistance Program to plans covering 1.15 million beneficiaries, according to the PBGC.

Grants are calculated to ensure plan solvency through 2051.

Pension funds that receive PBGC 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.