WASHINGTON, D.C. — The Pension Benefit Guaranty Corporation (PBGC) announced today that it has approved the supplemented application submitted to the Special Financial Assistance (SFA) Program by the Road Carriers Local 707 Pension Plan (Road Carriers Local 707 Plan). The plan, based in Hempstead, New York, covers 3,804 participants in the transportation industry.
Plans that applied for and received SFA under the interim final SFA rule issued in July 2021 are permitted to supplement their applications under the provisions of the final rule issued in July 2022. The Road Carriers Local 707 Plan will receive approximately $114.1 million in supplemented SFA, which is in addition to $726.6 million in SFA approved for the plan by PBGC in January 2022 under the interim final rule. SFA will better ensure that the plan can continue to pay retirement benefits without reduction for many years into the future.
“Today’s approval of supplemental Special Financial Assistance, funded by President Biden’s American Rescue Plan, in conjunction with the previously approved Special Financial Assistance, means the Road Carriers Local 707 Plan will be able to provide the retirement promised to its 3,804 transportation industry workers,” said Secretary of Labor Marty Walsh, Chair of the Pension Benefit Guaranty Corporation’s Board of Directors. “Through no fault of their own, these workers faced diminished pensions, but will now receive the secure retirement they were promised in exchange for many years of work.”
About the Special Financial Assistance Program
The SFA Program was enacted as part of the American Rescue Plan (ARP) Act of 2021. 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.
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 operates under a final rule, published in the Federal Register on July 8, 2022, which became effective August 8, 2022.
As of December 9, 2022, PBGC has approved nearly $45.4 billion to plans that cover over 550,000 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.