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 Retail Clerks Specialty Stores Pension Plan (Retail Clerks Plan). The plan, based in Concord, California, covers 1,279 participants in the service industry.
The Retail Clerks Plan will receive approximately $60.4 million in special financial assistance, including interest to the expected date of payment to the plan. The plan was projected to become insolvent and run out of money in 2024. Without the SFA Program, the Retail Clerks Plan would have been required to reduce participants’ benefits to the PBGC guarantee levels upon plan insolvency, which is roughly 15 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.
"For decades, many Americans have worked toward the promise of a well-earned retirement after a lifetime of hard work,” said Acting Secretary of Labor Julie Su. “Thanks to President Biden’s historic investment in America’s workers and retirees, these workers will get the full benefits they have earned, allowing them to retire with the dignity they deserve.”
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 July 11, 2023, PBGC has approved over $51 billion in SFA to plans that cover over 712,000 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.