WASHINGTON — The Pension Benefit Guaranty Corporation (PBGC) announced today that it has approved the application submitted to the Special Financial Assistance (SFA) Program by the Carpenters Industrial Council Lumber Industry Pension Plan (CIC Lumber Industry Plan). The plan, based in Portland, Oregon, covers 5,834 participants in the construction industry.
The CIC Lumber Industry Plan will receive approximately $110.9 million in SFA, including interest to the expected date of payment to the plan. The plan was projected to become insolvent and run out of money in 2035. Without the SFA Program, the CIC Lumber Industry Plan would have been required to reduce participants’ benefits to the PBGC guarantee levels upon plan insolvency, which is roughly 15% below the benefits payable under the terms of the plan. That means, if not for the SFA Program, participants in the plan would have seen their monthly pension benefits reduced, on average, by roughly 15%, beginning in 2035. SFA will enable the plan to continue to pay retirement benefits without reduction for many years into the future.
“Many Americans have worked for decades toward the promise of a well-earned retirement after a lifetime of hard work,” said Acting Secretary of Labor Julie A. Su. “Today, the Biden-Harris Administration is delivering on that promise for workers in the CIC Lumber Industry Plan by providing special financial assistance under the American Rescue Plan to ensure that they can retire with the dignity they deserve.”
The SFA Program was enacted as part of the American Rescue Plan (ARP) Act – signed by President Biden on March 11, 2021. Through November 27, 2024, five pension plans covering approximately 35,000 Carpenters across the country have received a total of $977.4 million in special financial assistance. Thanks to the American Rescue Plan and SFA, these Carpenters have been saved from cuts to their earned pension benefits.
About the Special Financial Assistance Program
The SFA 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 November 27, 2024, PBGC has announced approval of about $69.7 billion in SFA to 102 plans that cover about 1,230,000 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 about 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.