PBGC Approves $635M to Carpenters Pension Fund
The Pension Benefit Guaranty Corporation announced Thursday that it will provide a $635 million special financial assistance grant to the Carpenters Pension Trust Fund – Detroit & Vicinity, also known as the Detroit Carpenters Fund.
The Troy, Michigan-based Detroit Carpenters Fund, which has 22,576 participants in the construction industry, was expected to become insolvent in 2033. According to the fund’s Form 5500 filing, the pension had about $764 million in assets and $2.262 billion in liabilities, representing a funded status of approximately 34.3%.
“Millions of people work for years, looking forward to the day when the promise of a secure, dignified retirement is kept,” said Acting Secretary of Labor Julie A. Su in a statement. “Today, the Biden-Harris administration is delivering on that promise.”
The Special Financial Assistance 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.
As of October 17, the PBGC reported it has provided $68.6 billion in special financial assistance to plans which cover more than 1.179 million workers, retirees and beneficiaries since the program was enacted in March 2021.
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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