The Pension Benefit Guaranty Corporation granted $20.6 million to the Paper Handlers-Publishers Pension Plan, a multiemployer pension for workers in the printing industry.
The New York City-based plan had 244 participants and was projected to become insolvent in 2024, absent a special financial assistance grant. At that time, it would have had to fall back on PBGC guaranteed levels, which would mean a 45% cut in benefits.
Funding via the Special Financial Assistance Program is now projected to keep recipients solvent through 2051.
According to the fund’s Form 5500, the plan had 24 active participants at the end of 2021, 116 retired participants receiving benefits and 31 entitled to receive benefits in the future. The plan had $5.76 million in assets and was 21.3% 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: Multiemployer, PBGC, SFA