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 Plasterers and Cement Masons Local No. 94 Pension Fund (Plasterers and Cement Masons Local 94 Fund). The plan, based in Camp Hill, Pennsylvania, covers 108 participants in the construction industry.
On May 1, 2019, the Plasterers and Cement Masons Local 94 Fund implemented a benefit suspension under the Multiemployer Pension Reform Act of 2014 (MPRA) and was partitioned into two plans. The MPRA suspension reduced participants’ benefits earned as of May 1, 2019, by the maximum amount allowed under MPRA. Benefits of about 70 plan participants were reduced, on average, by 40 percent.
PBGC’s approval of the SFA application rescinds the partition and 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 $3.2 million in SFA, including interest to the expected date of payment to the plan.
“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 A. Su. “Today, the Biden-Harris administration is delivering on that promise by providing Special Financial Assistance for workers of Local 94 under the American Rescue Plan to ensure that they can retire with the dignity they deserve.”
In addition to the $3.2 million of SFA paid to the plan, PBGC’s Multiemployer Insurance Program will be repaid about $661,000, which is the amount of the plan’s outstanding loans, including interest, for the financial assistance PBGC provided beginning in May 2019 and ending on the expected date of payment of SFA to the plan.
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 September 12, 2023, PBGC has approved $53.4 billion in SFA to plans that cover about 767,000 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.