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PBGC Sends Financial Assistance to Struggling Multiemployer Plans

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PBGC Sends Financial Assistance to Struggling Multiemployer Plans
FOR IMMEDIATE RELEASE
October 28, 2014

WASHINGTON - The Pension Benefit Guaranty Corporation has sent an initial installment of more than $284,000 to cover benefits for 365 people in two insolvent multiemployer plans in New York.

PBGC recently distributed the funds because these plans have run out of money and are unable to pay promised benefits. Quarterly payments will be sent to both plans to pay PBGC guaranteed benefits for current and future retirees.

Unlike the agency's program for single-employer pensions, PBGC doesn't assume responsibility for insolvent multiemployer plans. Instead, the agency sends financial assistance so the plans can pay benefits at no more than the PBGC guarantee level. 

Coverage for people in multiemployer plans is based on years of service and the rate that benefits are earned. For example:


Years of Service

 

Monthly Benefit Accrual Rate

 

$10

$20

$50

$100



10

Annual Plan Benefits

$1,200

$2,400

$6,000

$12,000

Annual PBGC Guaranteed

$1,200

$2,130

$4,290

$4,290



20

Annual Plan Benefits

$2,400

$4,800

$12,000

$24,000

Annual PBGC Guaranteed

$2,400

$4,260

$8,580

$8,580



30

Annual Plan Benefits

$3,600

$7,200

$18,000

$36,000

Annual PBGC Guaranteed

$3,600

$6,390

$12,870

$12,870

 About the plans:
Teamsters Local 531 Pension Plan

The agency sent about $108,100 to pay benefits for 184 current and retired transportation workers covered under the Teamsters Local 531 Pension Plan based in Brooklyn. The plan notified PBGC that it was running out of money on July 29, 2013. The agency estimates the total financial commitment to the plan at more than $14.9 million.

Local 976 ILA Pension Fund

PBGC sent $176,000 to cover benefits for 181 current and former longshoremen under the Local 976 International Longshoremen's Association Pension Fund in Manhattan. The plan notified PBGC that it was insolvent on Feb. 27, 2014. The agency estimates the total financial commitment to the plan at more than $9.8 million.

About PBGC and the Multiemployer Program

In its multiemployer program during FY 2013, PBGC paid $89 million in financial assistance to 44 multiemployer pension plans covering the benefits of nearly 50,000 retirees. An additional 21,000 people in these plans will receive benefits when they retire.

PBGC protects the pension benefits of more than 42 million Americans in private-sector pension plans. The agency is directly responsible for paying the benefits of more than 1.5 million people in failed pension plans. PBGC receives no taxpayer dollars and never has. Its operations are financed by insurance premiums, investment income, and with assets and recoveries from failed plans. Learn more at PBGC.gov

Press Release Number: 
14-13