Teamsters Local 966 Receives $8 Million in PBGC Supplemental Assistance
The New Jersey-based plan’s total aid from the PBGC now exceeds $60 million.
The Pension Benefit Guaranty Corp. has provided Supplemental Special Financial Assistance to another Teamsters-affiliated pension plan.
The Teamsters Local 966 Health Pension Plan, based in Cresskill, New Jersey, originally received $54.1 million in December 2022 in SFA funds. The plan was projected to become insolvent some time in 2023 and would have had to cut benefits to PBGC minimum levels for all of its 2,356 participants, a cut of 10%.
In January, the plan applied for additional funding based on the SFA final rule, which changed the actuarial assumptions that determined how SFA funds would be calculated. The PBGC provided an additional $8.6 million to the plan to make up the difference between the two calculations.
The SFA provision of the American Rescue Plan Act allows for PBGC funding for severely underfunded multiemployer pension plans. 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.