The American Rescue Plan (ARP) Act of 2021, enacted on March 11, 2021, allows certain financially troubled multiemployer plans to apply for special financial assistance.
The Pension Benefit Guaranty Corporation (PBGC) created a Special Financial Assistance (SFA) Program. This program addresses the immediate financial crisis threatening the retirement security of over three million American workers, retirees, and their families.
The program will provide an estimated $94 billion in assistance to more than 200 eligible plans that are severely underfunded.
- SFA Program assists plans by providing funds to reinstate previously suspended benefits.
- ARP also addresses the solvency of PBGC’s Multiemployer Insurance Program, which was projected to become insolvent in 2026.
- These hard-earned benefits are critical to the peace of mind and economic security of millions of retirees and their families.
- Sets forth what information a plan is required to file in its application to demonstrate eligibility for SFA and the formula to determine the amount of SFA that PBGC will pay to an eligible plan.
- Identifies the priority order in which plans are permitted to apply, including a mechanism to prioritize the most impacted plans and participants first.
- Outlines a processing system, which will accommodate the filing and review of many applications in a limited amount of time.
- Specifies permissible investments for SFA funds and establishes certain restrictions and conditions on plans that receive SFA.