1 New York, 2 Michigan Pension Plans Receive PBGC Assistance
The three supplemental SFA packages provide a total of more than $200 million.
The Pension Benefit Guaranty Corporation approved supplemented Special Financial Assistance applications for three union pension plans on Friday.
The Detroit Newspaper Union Plan, part of the Graphic Communications Conference of the Teamsters Union (formerly known as the Graphic Communications International Union), was granted $18.2 million in supplemental assistance in addition to the $119 million the plan received in April 2022. The plan is based in Warren, Michigan, and covers 563 participants.
The plan became insolvent in April 2019, when it instituted a 35% benefit cut. It had initially applied for special financial assistance in December 2021.
The second union pension plan to receive supplemental SFA last week was the Painters Local 466 Pension Plan, a Menands, New York-based pension fund with 45 participants. The plan will receive $1.2 million on top of the $5.9 million it received in June 2022.
The plan became insolvent in November 2020 and cut benefits by 45%. The DOL and IRS acknowledged the plan as being in critical status as early as July 2017.
The last supplemental SFA package approved Friday was for the Graphic Communications Union Local 2-C Retirement Benefit Plan, also known as the GCU 2-C Plan. The Warren, Michigan-based plan will receive $220,000 on top of the $59.1 million it received in April 2022. The plan covers 435 participants in the printing industry.
The SFA provision of the American Rescue Plan Act allows for PBGC grants to severely underfunded multiemployer pension plans. 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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