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 Composition Roofers Local 42 Pension Plan (Roofers Local 42 Plan). The plan, based in Cincinnati, Ohio, covers 495 participants in the construction industry.
On April 1, 2020, the Roofers Local 42 Plan implemented a benefit suspension under the terms of the Multiemployer Pension Reform Act of 2014 (MPRA) in order to address the plan’s troubled financial condition at that time and its projected insolvency. The plan reduced benefits of about 400 plan participants. On average, affected participants’ benefits were reduced by 35 percent.
PBGC’s approval of the SFA application enables the plan to restore all benefits suspended under the terms of MPRA and to make payments to retirees to cover prior benefit suspensions. SFA will enable the plan to pay retirement benefits without reduction for many years into the future. The plan will receive $33.6 million in SFA, including interest to the expected date of payment to the plan.
“President Biden’s American Rescue Plan will deliver Special Financial Assistance to the Roofers Local 42 Plan that ensures these 495 construction workers and retirees covered by this plan will receive the retirement benefits they have earned,” said Assistant Secretary of Labor for Employee Benefits Security Lisa M. Gomez. “This assistance will deliver the secure retirement these workers were promised in return for many years of hard 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.
As of June 29, 2023, PBGC has approved about $49.7 billion in SFA to plans that cover over 687,000 workers, retirees, and beneficiaries.
The SFA Program operates under a final rule, published in the Federal Register on July 8, 2022, which became effective August 8, 2022, and was amended effective January 26, 2023.