PBGC Provides Financial Assistance to Struggling Metal Workers Pension

Link: https://www.ai-cio.com/news/pbgc-provides-financial-assistance-to-struggling-metal-workers-pension/

Excerpt:

The Pension Benefit Guaranty Corporation approved a Special Financial Assistance program from a Metal Sheet Workers local pension plan in Massillon, Ohio, on Wednesday.

The plan covered 1,649 participants in the sheet metal trade. About 850 of them saw their benefits cut an average of 24% in May 2020 under the terms of the Multiemployer Pension Reforms Act of 2014. SFA will pay $28.8 million to make up the shortfall.

The MPRA allowed trustees of multiemployer plans to submit an application to the Treasury Department to reduce pension payouts if such a reduction is necessary to prevent the fund from running out of money.

Author(s): Paul Mulholland

Publication Date: 7 Oct 2022

Publication Site: ai-CIO

SFA Update – 9/2/22

Link: https://burypensions.wordpress.com/2022/09/02/sfa-update-9-2-22/

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Excerpt:

The PBGC Special Financial Assistance program for troubled multiemployer plans updated today with one new filer (Toledo Roofers Local No. 134 Pension Plan), one withdrawal (Bricklayers Union Local No. 1 Pension Fund) and one approval asking for more (Local Union No. 466 Painters, Decorators and Paperhangers Pension Plan). 

Author(s): John Bury

Publication Date: 2 Sept 2022

Publication Site: burypensions

PBGC Finalizes Rescue of Ailing Multiemployer Pension Plans

Link: https://www.ai-cio.com/news/pbgc-finalizes-rescue-of-ailing-multiemployer-pension-plans/

Excerpt:

The Pension Benefit Guaranty Corporation, under the direction of the Biden administration, has published the final rule implementing the American Rescue Plan Act of 2021’s Special Financial Assistance program.

According to supporters of the program, the Special Financial Assistance program, which is already operating on an interim basis, will protect millions of workers in stressed multiemployer union pension plans who previously faced the possibility of significant cuts to their benefits.

….

Initially, the interim final rule applied a single rate of return included in the statute that is higher than could be expected for SFA funds given that they were required to be invested exclusively in safe, but low-return, investment-grade fixed-income products. The final rule uses two different rates of return for SFA and non-SFA assets, so that the interest rate for SFA assets is more realistic given the investment limitations on these funds.

Another change in the final rule allows up to 33% of SFA to be invested in return-seeking assets that are projected to allow plans to receive a higher rate of return on their investments than under the interim final rule, subject to certain protections. Namely, this portion of plans’ SFA funds generally must be invested in publicly traded assets on liquid markets to ensure responsible stewardship of federal funds. These return-seeking investments include equities, equity funds and bonds. The other 67% of SFA funds must be invested in investment-grade fixed-income products.

The third major change is meant to ensure plans can confidently restore both past and future benefits and enter 2051 with rising assets. PBGC designed the final rule to ensure that no “MPRA plan”—a group of fewer than 20 multiemployer plans that remained solvent by cutting benefits pursuant to the Multiemployer Pension Reform Act of 2014—was forced to choose between restoring its benefit payments to previous levels and remaining indefinitely solvent. Instead, the final rule ensures that all MPRA plans avoid this dilemma, supporting them with enough assistance so that these plans can both restore benefits and be projected to remain indefinitely solvent going into 2051.

According to PBGC leadership, these changes collectively ensure that all plans that receive SFA are projected to be solvent and pay full benefits through at least 2051.

Author(s): John Manganaro

Publication Date: 7 July 2022

Publication Site: ai-CIO

UMWA 5500 Update – 6/30/21

Link: https://burypensions.wordpress.com/2022/06/02/umwa-5500-update-6-30-21/

Excerpt:

Five years ago retired coal miners traveled to Washington, D.C. to lobby lawmakers to put in place a federal safety net in case the United Mine Workers of America (UMWA) pension fund fails. Coal plant closures and company bankruptcies have sent the pension fund to the edge of collapse. In October, 2019 Murray Energy, the last major company propping up the dwindling fund, also went bankrupt and the prediction was insolvency in FY23.

By the April 15, 2022 deadline, the plan submitted their 5500 form for the year ended 6/30/21 showing only 68 active participants remaining and providing an idea of how much more taxpayers will now be on the hook for on top of what appears to be the $330 million that came in during the plan year.

Author(s): John Bury

Publication Date: 3 June 2022

Publication Site: Burypensions

PBGC Approves Bailouts for Five More Multiemployer Plans in May

Link: https://www.ai-cio.com/news/pbgc-approves-bailouts-for-five-more-multiemployer-plans-in-may/

Excerpt:

The Pension Benefit Guaranty Corporation has approved applications submitted to the Special Financial Assistance Program by five more struggling multiemployer plans in May alone. The PBGC has now approved more than $6.2 billion in bailout funds to plans covering close to 120,000 workers and retirees.

The PBGC said it will provide $210.4 million in SFA funding to the Local 365 UAW Pension Fund Pension Plan of Englewood Cliffs, New Jersey, which covers 3,736 participants in the manufacturing industry.

The Local 365 UAW Plan became insolvent in December 2020, at which time the PBGC began providing the plan with financial assistance. As required by law, the plan reduced participants’ benefits to the PBGC guarantee levels, which were approximately 20% below the benefits payable under the terms of the plan.

Author(s): Michael Katz

Publication Date: 23 May 2022

Publication Site: ai-CIO

SFA Update – Two Refilers

Link: https://burypensions.wordpress.com/2022/05/20/sfa-update-two-refilers/

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Excerpt:

The PBGC Special Financial Assistance program for troubled multiemployer plans weekend update showed a refiling of a prior withdrawal (America’s Family Benefit Retirement Plan) that asked for $4,.5 million less and one withdrawal and immediate refile (UTWA NJ Union Employer Pension Plan) that asked for $17,918 more.

Author(s): John Bury

Publication Date: 20 May 2022

Publication Site: burypensions

Breaking News: Central States Filed

Link: https://burypensions.wordpress.com/2022/04/29/breaking-news-central-states-filed/

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Excerpt:

The first 34 plans that filed requested a total $8.4 billion in bailout money from the PBGC Special Financial Assistance program for troubled multiemployer plans. No press release but the PBGC weekend update showed one new plan – the Central States, Southeast & Southwest Areas Pension Plan with 364,908 participants which is asking for $35 billion dollars.

Author(s): John Bury

Publication Date: 29 Apr 2022

Publication Site: burypensions

SFA Update – One Revision; One Withdrawal

Link:https://burypensions.wordpress.com/2022/04/15/sfa-update-one-revision-one-withdrawal/

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Excerpt:

The PBGC Special Financial Assistance program for troubled multiemployer plans weekend update showed one plan withdrawing and reapplying immediately with another simply withdrawing.

Our updated summary of the 35 plans in the system – 10 approvals and 25 under review:

Author(s): John Bury

Publication Date: 15 Apr 2022

Publication Site: Burypensions

2021 Academy Legislative/Regulatory Review

Link: https://www.actuary.org/sites/default/files/members/alerts/pdf/2022/2022-CP-1.pdf

Excerpt:

The American Academy of Actuaries presents this summary of select significant regulatory and
legislative developments in 2021 at the state, federal, and international levels of interest to the U.S.
actuarial profession as a service to its members.

Introduction

The Academy focused on key policy debates in 2021 regarding pensions and retirement, health, life,
and property and casualty insurance, and risk management and financial reporting.


Responding to the COVID-19 pandemic, addressing ever-changing cyber risk concerns, and analyzing
the implications and actuarial impacts of data science modeling continued to be a focus in 2021.


Practice councils monitored and responded to numerous legislative developments at the state, federal,
and international level. The Academy also increased its focus on the varied impacts of climate risk and
public policy initiatives related to racial equity and unfair discrimination in 2021.


The Academy continues to track the progress of legislative and regulatory developments on actuarially
relevant issues that have carried over into the 2022 calendar year.

Publication Date: 15 Feb 2022

Publication Site: American Academy of Actuaries

Teamsters Pension Applies for Bailout After $58 Million Legal Appeal Dismissed

Link: https://www.ai-cio.com/news/teamsters-pension-applies-for-bailout-after-58-million-legal-appeal-dismissed/

Excerpt:

A Teamsters pension fund has applied to the Pension Benefit Guaranty Corporation for a bailout after a circuit court denied its appeal in a lawsuit seeking $58 million in withdrawal liabilities from C&S Wholesale Grocers Inc.

The New York State Teamsters Conference Pension and Retirement Fund, a multiemployer plan based in Syracuse, New York, has applied to PBGC for special financial assistance under the American Rescue Plan Act to improve its financial health and restore benefits previously suspended under the Multiemployer Pension Reform Act. The pension fund said the restoration of suspended benefits would be retroactive and prospective, which means participants would be repaid for benefits reduced previously, while also having benefits restored to pre-suspension levels.

Author(s): Michael Katz

Publication Date: 14 Feb 2022

Publication Site: ai-CIO

Education & Labor Committee Releases Multiemployer Pension Rescue Tracker

Link:https://edlabor.house.gov/media/press-releases/education-and-labor-committee-releases-multiemployer-pension-rescue-tracker

Graphic:

Excerpt:

Today, the House Committee on Education and Labor unveiled a new Multiemployer Pension Rescue Tracker to highlight the hard-earned pensions saved and businesses protected under Congressional Democrats’ and President Biden’s American Rescue Plan Act.  The multiemployer pension crisis – which was accelerated by the COVID-19 pandemic – threatened to strip more than a million retirees of the pensions they earned over a lifetime of work, jeopardized tens of thousands of businesses and endangered tens of thousands of jobs.

In response, the American Rescue Plan Act created a Special Financial Assistance (SFA) Program to avert the immediate crisis threatening the retirement security of American workers, retirees, and their families.  This solution was supported by a diverse group of stakeholders, including the AFL-CIO, AARP, the United States Chamber of Commerce, UPS and scores of other employers who participate in multiemployer plans.

….

To view the pension tracker, click here.

Author: Education and Labor Committee

Publication Date: 2 Feb 2022

Publication Site: House of Representatives