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 Legacy Plan of the UNITE HERE Retirement Fund (UNITE HERE Fund). The plan, based in White Plains, New York, covers 91,744 participants in the hospitality industry.
The UNITE HERE Fund will receive approximately $868.8 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 2030. Without the SFA Program, the UNITE HERE Fund 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 by roughly 15%. SFA will enable the plan to continue to pay retirement benefits without reduction for many years into the future.
The SFA Program was enacted as part of the American Rescue Plan (ARP) Act – signed by President Biden on March 11, 2021. Through January 15, 2025, two pension plans covering approximately 94,000 hospitality workers across the country have received a total of $902.1 million in special financial assistance. Thanks to the American Rescue Plan and the SFA Program, these hospitality workers have been saved from cuts to their earned pension benefits.
“The American Rescue Plan provided the most significant action in over 50 years to ensure workers and retirees enjoy the secure retirement they have earned. Now, with this Special Financial Assistance to the Legacy Plan of the UNITE HERE Retirement Fund, 91,744 UNITE HERE workers and retirees will have their pension benefits protected from expected future cuts,” said Acting Secretary of Labor Julie A. Su. "These workers are the backbone of our economy and deserve to retire with dignity. The Biden-Harris administration has stood with workers time and time again, ensuring that more than 1.3 million workers, retirees and their families will receive their full retirement 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 January 15, 2025, PBGC has announced approval of about $70.9 billion in SFA to 109 plans that cover about 1,336,000 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.