The Pension Benefit Guaranty Corporation has approved applications submitted to the Special Financial Assistance Program by five more struggling multiemployer plans in May alone. The PBGC has now approved more than $6.2 billion in bailout funds to plans covering close to 120,000 workers and retirees.
The PBGC said it will provide $210.4 million in SFA funding to the Local 365 UAW Pension Fund Pension Plan of Englewood Cliffs, New Jersey, which covers 3,736 participants in the manufacturing industry.
The Local 365 UAW Plan became insolvent in December 2020, at which time the PBGC began providing the plan with financial assistance. As required by law, the plan reduced participants’ benefits to the PBGC guarantee levels, which were approximately 20% below the benefits payable under the terms of the plan.
The $210.4 million will allow the plan to restore all benefit reductions caused by its insolvency, and to make payments to retirees to cover previous benefit reductions.
Additionally, the PBGC’s Multiemployer Insurance Program will be repaid $17.9 million, which is the amount of the plan’s outstanding loans, including interest, for the financial assistance PBGC provided since December 2020.
The PBGC is also giving $118.3 million to the New York City-based Local 805 Pension and Retirement Plan, which covers 2,003 participants in the transportation industry. The Local 805 Plan implemented a benefit suspension under the Multiemployer Pension Reform Act of 2014 on January 1, 2019, and was partitioned into two plans. The MPRA suspension reduced the participants’ benefits earned as of December 31, 2018, by the maximum amount allowed under the MPRA. The benefits of approximately 1,500 plan participants had been reduced by an average of 41%.
The SFA approval rescinds the partition and will enable the plan to restore all benefits suspended under the terms of the MPRA and to pay retirees to cover prior benefit suspensions. With the approval, the PBGC’s Multiemployer Insurance Program will be repaid the $17.8 million amount of the plan’s outstanding loans, including interest, for the financial assistance PBGC provided since the partition.
Meanwhile, the Mastic, New York-based Management-Labor Pension Plan Local 1730 ILA, also known as the Longshoremen Local 1730 Plan, is set to receive $59.1 million in SFA funding for its 478 participants in the transportation industry.
The Longshoremen Local 1730 became insolvent in November 2020, which is when the PBGC started providing it with financial assistance. The plan had reduced participants’ benefits to the PBGC guarantee levels, which were approximately half of the benefits payable under the terms of the plan. The fund will also repay $2.9 million to the PBGC’s Multiemployer Insurance Program for the financial assistance it has provided since the plan’s insolvency.
And the Iron Workers Local 17 Pension Fund of Cleveland, which covers 1,900 participants in the construction industry, has been approved to receive $48.9 million in bailout funds. The plan implemented a benefit suspension under the MPRA on February 1, 2017, which affected approximately 950 participants who, on average, saw their benefits cut by 30%.
The PBGC also approved $11.3 million in funding for the Carpenters Industrial Council of Eastern Pennsylvania Pension Plan, which is based in Ashland, Pennsylvania, and covers 242 participants in the construction industry.
The Carpenters Pension Plan has been receiving financial assistance from the PBGC since it became insolvent in October 2017, at which time the plan reduced participants’ benefits to roughly 5% below the benefits payable under the terms of the plan. As a result of the SFA approval, the Multiemployer Insurance Program will be reimbursed the $2.8 million in outstanding loans, including interest, that it had provided the plan since October 2017.
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