Teamsters Plan Receives $5.7B From PBGC

The grant will keep the plan solvent through 2051.



The Pension Benefit Guaranty Corporation issued a $5.7 billion grant to the New England Teamsters Pension Fund. This grant amount is second only to the $35.8 billion grant issued to another Teamsters plan, the Central States, Southeast & Southwest Areas Pension Plan, in December 2022.

The Burlington, Massachusetts-based plan covers 72,141 participants in the transportation industry. The grant will protect them from an insolvency that was anticipated for 2028, at which point the plan would have had to cut benefits across the board by 75%.

According to the plan’s Form 5500, it had about $3.35 billion in assets at the end of 2022. It had 21,786 active participants, 26,177 retired participants, 16,768 participants who are separated but entitled to future benefits, and 7,190 deceased participants with surviving beneficiaries. The plan was 20.6% funded.

The PBGC has issued a total of about $67.7 billion in grants under the SFA program, protecting the pensions of nearly 1.15 million participants.

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The SFA provision of the American Rescue Plan Act of 2021 allows for PBGC funding for severely underfunded multiemployer pension plans. Grants are calculated to ensure plan solvency through 2051.

Pension 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.

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CDPQ Finances $75M in Second Investment in Quebec Data Center Provider Vantage

Institutional investors are fueling momentum in data centers, which continue to grow in 2024, according to CBRE research.



Canadian pension fund Caisse de dépôt et placement du Québec is investing C$103 million ($75 million) in senior financing to support the expansion of data center management firm Vantage Data Centers’ Quebec City campus.  

According to the C$434 billion pension fund, the investment will help fund the construction of a third building on the data center campus, which will add an additional 16 megawatts of computing capacity “to meet the growing demand for cloud services in Québec and Eastern Canada.” According to CDPQ, the site will eventually contain four buildings.

The total credit facility of C$179 million was structured and underwritten by French bank Société Générale. Canadian construction company Pomerleau is leading the project, and the campus will cover 925,000 square feet and generate a total capacity of 86 MW.

The investment in Vantage Data Centers is the CDPQ’s latest investment in the data center sector and its second in Vantage. In May, the pension fund, along with Ares Management and Schroders Capital, agreed to provide up to 750 million euros ($814.3 million) to help Vantage expand its platform in Europe, the Middle East and Africa. Earlier this year, the pension fund participated in a $7.5 billion debt financing facility to help artificial intelligence cloud computing company CoreWeave fund its hyperscale data centers.

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A hyperscale data center provides “extreme scalability capabilities and is engineered for large-scale workloads with an optimized network infrastructure, streamlined network connectivity and minimized latency,” according to information from IBM.

“The rise of data-intensive technologies and the adoption of cloud services are transforming the North American digital infrastructure market,” said Marc Cormier, CDPQ’s head of fixed income, in a statement. “Vantage Data Centers is uniquely positioned to seize this opportunity with its extensive experience in developing and operating data centers, as well as its long-standing client relationships.”

According to CBRE’s North America Data Center Trends report for the second half of 2023, data centers are attracting new capital from institutional investors due to “record tenant demand, historic low supply, strong rental growth, and investment performance.”

The report found that the average data center asking rate in North America increased 18.6% year-over-year in 2023, the sharpest-ever yearly increase. It also found that primary market supply rose 26% from the previous year and that total transaction volume of all data center asset sales increased year-over-year.

“The data center sector’s momentum is continuing this year, fueled by institutional investment and strong underlying fundamentals,” the CBRE report stated. “The reliance on data center facilities and digital infrastructure for business, commerce, and communication grows daily.”

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CDPQ Announces 7.2% Return in 2023

 

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