WASHINGTON, D.C. — The Pension Benefit Guaranty Corporation (PBGC) announced today that it has approved the application submitted to the Special Financial Assistance (SFA) Program by the Southern California, Arizona, Colorado and Southern Nevada Glaziers, Architectural Metal and Glass Workers Pension Plan (Southern California Glaziers Plan). The plan, based in Covina, California, covers 3,606 participants in the construction industry.
The Southern California Glaziers Plan became insolvent in January 2009, and the PBGC started providing financial assistance to the plan as of January 1, 2010. As required by law, the Southern California Glaziers Plan reduced participants’ benefits to the PBGC guarantee levels, which was roughly 50 percent below the benefits payable under the terms of the plan.
PBGC’s approval of the SFA application enables the plan to restore benefit reductions caused by the plan’s insolvency and to make payments to retirees to cover prior benefit reductions. SFA will enable the plan to pay retirement benefits without reduction for many years into the future. The plan will receive $436.3 million in SFA, including interest to the expected date of payment to the plan.
“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. “Today, the Biden-Harris administration is delivering on that promise for 3,606 construction workers across the Southwest by providing Special Financial Assistance to the Southern California, Arizona, Colorado and Southern Nevada Glaziers, Architectural Metal and Glass Workers Pension Plan that ensures they can retire with the dignity they deserve.”
In addition to the $436.3 million of SFA paid to the plan, PBGC’s Multiemployer Insurance Program will be repaid $132.8 million, which is the amount of the plan’s outstanding loans, including interest, for the financial assistance PBGC provided beginning in January 2010 and ending on the expected date of payment of SFA to the plan.
About the Special Financial Assistance Program
The SFA Program was enacted as part of the American Rescue Plan (ARP) Act of 2021. The program provides funding to severely underfunded multiemployer pension plans and will ensure that millions of America’s workers, retirees, and their families receive the pension benefits they earned.
The SFA Program requires plans to demonstrate eligibility for SFA and to calculate the amount of assistance pursuant to ARP and PBGC’s regulations. SFA and earnings thereon must be segregated from other plan assets and may be used only to pay plan benefits and administrative expenses. Plans are not obligated to repay SFA to PBGC. Plans receiving SFA are also subject to certain terms, conditions and reporting requirements, including an annual statement documenting compliance with the terms and conditions. PBGC is authorized to conduct periodic audits of multiemployer plans that receive SFA.
As of August 29, 2023, PBGC has approved about $53 billion in SFA to plans that cover over 763,000 workers, retirees, and beneficiaries.
The SFA Program operates under a final rule, published in the Federal Register on July 8, 2022, which became effective August 8, 2022, and was amended effective January 26, 2023.
About PBGC
PBGC protects the retirement security of over 33 million American workers, retirees, and beneficiaries in both single-employer and multiemployer private sector pension plans. The agency’s two insurance programs are legally separate and operationally and financially independent. PBGC is directly responsible for the benefits of more than 1.5 million participants and beneficiaries in failed single-employer pension plans. The Single-Employer Program is financed by insurance premiums, investment income, and assets and recoveries from failed single-employer plans. The Multiemployer Program is financed by insurance premiums. Special financial assistance for financially troubled multiemployer plans is financed by general taxpayer monies.