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 IUE-CWA Pension Plan (IUE-CWA Plan). The plan, based in Pittsburgh, Pennsylvania, covers 13,760 participants in the manufacturing industry.
The IUE-CWA Plan will receive approximately $260 million in special financial assistance, including interest to the expected date of payment to the plan. The plan was projected to become insolvent and to run out of money in 2029. Without the SFA Program, the IUE-CWA 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.
“Middle-class families simply can’t afford to lose their hard-earned savings after a lifetime of work,” said Acting Secretary of Labor Julie Su. “Today’s approval of Special Financial Assistance by the Biden-Harris administration will ensure these 13,760 manufacturing workers across America can retire with the security and 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 August 1, 2023, PBGC has approved nearly $52.2 billion in SFA to plans that cover over 751,000 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.