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 Pacific Coast Shipyards Pension Plan (Pacific Coast Shipyards Plan). The plan, based in Pleasanton, California, covers 507 participants in the maritime construction industry.
The Pacific Coast Shipyards Plan will receive approximately $18.9 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 2032. Without the SFA Program, the Pacific Coast Shipyards Plan would have been required to reduce participants’ benefits to the PBGC guarantee level upon plan insolvency, which means that their benefits would have been cut by roughly 35 percent below the amount 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.
“These maritime construction industry workers helped build a better America and now the Biden-Harris administration is working to deliver the secure, dignified retirement they deserve,” said Acting Secretary of Labor Julie A. Su. “By providing Special Financial Assistance, the Biden-Harris administration will ensure that these 507 workers in the San Francisco Bay area get the benefits they have earned after a lifetime of hard work and can retire with dignity.”
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 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 June 20, 2024, PBGC has announced approval of about $57 billion in SFA to plans that cover about 915,000 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 31 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 nearly 1.4 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 and investment income. Special financial assistance for financially troubled multiemployer plans is financed by general taxpayer monies.