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 Ironworkers Local Union No. 16 Pension Plan (Ironworkers Local 16 Plan). The plan, based in Baltimore, Maryland, covers 996 participants in the construction industry.
On October 1, 2018, the Ironworkers Local 16 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 680 plan participants. On average, affected participants’ benefits were reduced 25 percent.
PBGC’s approval of the SFA application enables the Ironworkers Local 16 Plan to restore benefits suspended under the terms of MPRA and to make payments to retirees to cover prior benefit suspensions. SFA will enable the Ironworkers Local 16 Plan to pay retirement benefits without reduction for many years into the future. The plan will receive $75.8 million in SFA, including interest to the expected date of payment to the plan.
“Millions of people work for years, looking forward to the day when the promise of a secure, dignified retirement is kept,” said Acting Secretary of Labor Julie A. Su. “Today, the Biden-Harris administration is delivering on that promise for almost 1,000 ironworkers across Maryland by providing Special Financial Assistance to the Ironworkers Local Union No. 16 Pension Plan that ensures they can 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 August 30, 2023, PBGC has approved about $53.1 billion in SFA to plans that cover over 764,000 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.