The Pension Benefit Guaranty Corporation provided a $54.6 million Special Financial Assistance grant to the United Food and Commercial Workers Regional Pension Fund.
The regional fund covers 4,605 participants in the service industry and is based in Mount Laurel, New Jersey. The plan was in critical status, and as of the end of 2021, was only 33.47% funded.
At the end of 2021, the fund had $64.4 million in assets, 733 active participants, 1079 retired participants, and 2,385 separated participants entitled to benefits in the future.
The SFA provision of the American Rescue Plan Act 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.