WASHINGTON, D.C. — The Pension Benefit Guaranty Corporation (PBGC) announced today that it has approved the application submitted to the Special Financial Assistance (SFA) Program by the Teamsters Local 966 Pension Plan (Teamsters Local 966 Plan). The application was submitted and approved under provisions of PBGC’s SFA interim final rule. The plan, based in Cresskill, New Jersey, covers 2,356 participants in the transportation industry.
The Teamsters Local 966 Plan will receive approximately $54.1 million in Special Financial Assistance, including interest to the expected date of payment to the plan. The plan was projected to run out of money in 2023. Without the SFA Program, the Teamsters Local 966 Plan would have been required to reduce participants’ benefits to the PBGC guarantee levels upon plan insolvency, which is roughly 10 percent below the benefits payable under the terms of the plan. SFA will enable the plan to continue to pay retirement benefits without reduction for many years into the future.
“Special Financial Assistance, funded by President Biden’s American Rescue Plan, ensures the retirement these 2,356 transportation workers were promised is delivered,” said U.S. Secretary of Labor Marty Walsh, chair of the Pension Benefit Guaranty Corporation’s Board of Directors. “Without this funding these workers would have faced diminished pension payments that threaten the secure retirement that they worked many years to earn.”
About the Special Financial Assistance Program
The SFA Program was enacted as part of the American Rescue Plan Act of 2021 (ARP). The 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 through many years of hard work.
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 are not obligated to repay SFA to PBGC. 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.
The SFA Program currently operates under a final rule, published in the Federal Register on July 8, 2022, which became effective on August 8, 2022. SFA applications submitted before that date reflect the provisions of the interim final rule, published in the Federal Register on July 12, 2021.
As of December 1, 2022, PBGC has approved over $8.9 billion to plans that cover over 193,000 workers, retirees, and beneficiaries.
PBGC protects the retirement security of over 33 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 more than 1.5 million participants and beneficiaries in failed 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. Special financial assistance for financially troubled multiemployer plans is financed by general taxpayer monies.