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 Local 917 Pension Plan (Local 917 Plan). The plan, based in Floral Park, New York, covers 1,653 participants in the transportation industry.
The Local 917 Plan will receive approximately $22.1 million in special financial assistance, including interest to the expected date of payment to the plan. The plan was projected to become insolvent and run out of money in 2025. Without the SFA Program, the Local 917 Plan would have been required to reduce participants’ benefits to the PBGC guarantee levels upon plan insolvency, which is roughly 10 percent below the benefits payable under the terms of the plan. SFA will enable the plan to continue to pay retirement benefits without reduction for many years into the future.
“Middle-class families simply can’t afford to lose their hard-earned savings after a lifetime of work,” said Acting Secretary of Labor Julie A. Su. “Today’s approval of Special Financial Assistance by the Biden-Harris administration will ensure these New York transportation workers can retire with the security and dignity they deserve.”
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.