Traditional Financial Assistance for insolvent multiemployer plans

Traditional Financial Assistance (TFA) under section 4261 of ERISA provides financial assistance from PBGC to insolvent multiemployer pension plans that are unable to pay guaranteed benefits when due. Through this program, PBGC provides loans sufficient to enable eligible plans to continue paying guaranteed benefits and reasonable administrative expenses.

This page provides information on the statutory and regulatory framework governing traditional financial assistance, including eligibility requirements, application procedures, filing instructions, required actuarial and financial information, and ongoing reporting obligations applicable to plans receiving assistance. Users will also find relevant forms, guidance materials, and other resources intended to assist plans and practitioners in preparing and submitting complete and timely applications.

Eligibility and insolvency criteria

A multiemployer plan may be eligible for PBGC traditional financial assistance if all the following apply:

• The plan is a PBGC-covered multiemployer defined benefit plan.
• The plan is insolvent, or is expected to become insolvent, and cannot pay basic benefits when due.
• The plan sponsor has determined that the plan’s available resources are or will be insufficient to pay guaranteed benefits and reasonable administrative expenses.
• The plan sponsor files a Notice of Insolvency with PBGC and submits a formal application for financial assistance, including all required documentation.

Definition of insolvency

A plan is considered insolvent if it is unable to pay basic benefits when due during a plan year.  Insolvency is determined by the plan sponsor and must be reported to PBGC.

Key points

• Insolvency can be projected for the current or next plan year.
• PBGC provides financial assistance in the form of loans to cover guaranteed benefits and reasonable administrative expenses.
• Both terminated and ongoing plans may qualify if they meet the criteria above.

How to apply

For detailed instructions, click here.

There are two types of applications for financial assistance: 

1. Initial application

   • Must be filed no later than 90 days before the first month the plan is unable to pay guaranteed benefits.
   • Requires submission of comprehensive plan documentation, including participant data and financial records.
      

2. Recurring application

   • Filed as soon as practicable after the plan determines it cannot pay guaranteed benefits for a month (generally 30 days in advance).
   • Requires less documentation than the initial application.

Filing method

• All applications must be submitted through PBGC’s https://efiling.pbgc.gov/.
• Electronic files are preferred for all supporting documentation.

Once PBGC receives your application for traditional financial assistance, a member of our staff will contact you directly. During this initial outreach, you will receive:

• Confirmation that your application has been received and is under review.
• A detailed list of all required supporting documentation needed to complete your application review.
• Guidance on how to submit any outstanding materials and answers to any questions you may have about the process.