The Pension Benefit Guaranty Corporation (PBGC) has approved a partition application and will provide early financial assistance to the Plasters & Cement Masons Local No. 94 Pension Plan.
The plan is a construction industry multiemployer pension based in Harrisburg, Pennsylvania, that covers approximately 100 participants. According to PBGC and the union, the early financial assistance is being coupled with benefit reductions that are required as a condition for receiving assistance. The parties say these actions will help the plan avoid insolvency and continue to pay benefits to participants.
According to PBGC, effective May 1, 2019, the federal insurance organization will began providing financial assistance by moving a portion of the plan’s guaranteed benefit obligations to a new, separate plan that will have its costs reimbursed by PBGC.
In a statement, the parties say this will relieve some of the financial burden on the Cement Masons 94 Plan and, together with the benefit cuts, enable it to avoid insolvency. Plan participants whose benefits are moved to the new plan “will be treated the same as participants whose benefits remain entirely in the original plan.”
According to supplemental information provided by PBGC, the fact of whether a participant is in the original plan or the successor plan will not determine their benefit amount or reduction factor. PBGC and the union say “some participants in each plan will have their benefits reduced.”
“If benefits are reduced under the final suspension authorized by the U.S. Department of Treasury, the participant will receive the reduced amount,” PBGC says. “Otherwise, the participant will receive their full plan benefit. The Cement Masons 94 Plan has previously notified all plan participants of their post-suspension benefits.”