The Pension Benefit Guaranty Corporation approved applications submitted for the special financial assistance program by five other struggling multiemployer plans in May alone. The PBGC has now approved more than $6.2 billion in bailout funds for plans covering nearly 120,000 workers and retirees.
The PBGC said it will provide $210.4 million in SFA funding to the UAW Local 365 Pension Fund Retirement Plan in Englewood Cliffs, New Jersey, which covers 3,736 manufacturing industry participants. .
The UAW Local 365 plan became insolvent in December 2020, when the PBGC began providing financial assistance to the plan. As required by law, the plan reduced participants’ benefits to PBGC’s guarantee levels, which were approximately 20% lower than the benefits payable under the plan.
The $210.4 million will allow the plan to reinstate any benefit reductions caused by its insolvency and make payments to retirees to cover past benefit reductions.
In addition, PBGC’s multi-employer insurance program will be reimbursed $17.9 million, the amount of the plan’s outstanding loans, including interest, for financial assistance provided by PBGC since December 2020.
The PBGC also contributes $118.3 million to the New York City Local 805 Retirement and Retirement Plan, which covers 2,003 participants in the transportation industry. The Local 805 plan implemented a benefit suspension under the Multiemployer Pension Reform Act 2014 on January 1, 2019 and was split into two plans. The suspension of the MPRA reduced participants’ vested benefits as of December 31, 2018 by the maximum amount allowed under the MPRA. Benefits for approximately 1,500 plan members had been reduced by an average of 41%.
The SFA’s approval reverses the split and will allow the scheme to reinstate all benefits suspended under the MPRA and pay retirees to cover previous benefit suspensions. With the approval, PBGC’s Multi-Employer Insurance Program will be reimbursed $17.8 million of the plan’s outstanding loans, including interest, for financial assistance provided by PBGC since partition.
Meanwhile, Mastic’s New York-based Management-Labour Pension Plan Local 1730 ILA, also known as the Longshoremen Local 1730 Plan, is set to receive $59.1 million in SFA funding for its 478 participants in the transport industry.
Longshore Local 1730 became insolvent in November 2020, when the PBGC began providing financial assistance. The plan had reduced participants’ benefits to PBGC’s guarantee levels, which represented approximately half of the benefits payable under the plan. The fund will also reimburse $2.9 million to the PBGC multi-employer insurance program for the financial assistance it has provided since the plan’s insolvency.
And Cleveland’s Iron Workers Local 17 pension fund, which covers 1,900 construction industry participants, has been approved to receive $48.9 million in bailout funds. The scheme implemented a benefit suspension under the MPRA on February 1, 2017, which affected approximately 950 participants who, on average, had their benefits reduced by 30%.
The PBGC also approved $11.3 million in funding for the Carpenters Industrial Council of Eastern Pennsylvania Pension Plan, which is based in Ashland, Pennsylvania, and covers 242 construction industry participants.
The Carpenters Pension Scheme has been receiving financial assistance from the PBGC since it became insolvent in October 2017, when the scheme cut participants’ benefits to around 5% below the benefits payable under the scheme. Following the TFA’s approval, the Multi-Employer Insurance Program will be reimbursed the $2.8 million in outstanding loans, including interest, that it had provided to the scheme since October 2017.
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Tags: 805 Pension and Retirement Plan, Carpenters Industrial Council of Eastern Pennsylvania Pension Plan, Iron Workers Local 17 Pension Fund, Local 365 UAW Pension Fund Pension Plan, Longshoremen Local 1730 Plan, Management-Labour Pension Plan Local 1730 ILA, Insurance Program multi-employer, PBGC, Pension Benefit Guaranty Corporation, SFA, Special Financial Assistance Program