WASHINGTON, D.C. — The Pension Benefit Guaranty Corporation (PBGC) announced today that it has approved the plan application for the Idaho Signatory Employers-Laborers Pension Plan (Idaho Signatory) in Portland, Ore. The plan covers 682 participants in the construction industry and will receive $13.9 million in special financial assistance, including interest to the expected date of payment to the plan.
The plan was projected to run out of money in 2022. Without the Special Financial Assistance Program, Idaho Signatory 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. Special financial assistance will enable the plan to continue to pay retirees’ benefits without reduction for many years into the future.
About the Special Financial Assistance Program
The SFA Program was enacted as part of the American Rescue Plan Act of 2021 (ARP). The program is expected to provide funding to over 250 severely underfunded pension plans and will ensure that over three million of America’s workers, retirees, and their families receive the pension benefits they earned through many years of hard work.
The SFA Program requires plans to demonstrate eligibility for special financial assistance and to calculate the amount of assistance pursuant to ARP and PBGC’s regulations. A plan may use the funds only to pay plan benefits and administrative expenses. SFA and earnings thereon must be segregated from other plan assets and plans are not obligated to repay SFA to PBGC. Plans receiving SFA are also subject to certain conditions and reporting requirements, including an annual statement documenting its compliance with the terms and conditions. PBGC is authorized to conduct periodic audits of multiemployer plans that receive SFA.
The Special Financial Assistance Program operates under an Interim Final Rule which was published in the Federal Register on July 12, 2021. The Interim Final Rule included a request for public comments, with an emphasis on feedback where any additional guidance may be needed. PBGC is currently reviewing those comments and may incorporate changes in the Final Rule in response to comments that PBGC received.