Benefits November 4, 2024

Four Distressed Pension Funds Approved for PBGC Grants

Support is approved for Teamsters Local 111, Marine Carpenters Fund, UFCW Tri-State Plan and I.B.E.W Pacific Coast Fund.

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The Pension Benefit Guaranty Corporation on Friday approved financing through the Special Financial Assistance Program to four distressed pension funds. Pension funds facing insolvency may apply for special financial assistance.

Teamsters Local 111, a Brooklyn-based plan with 1,600 participants, will receive $17.1 million in SFA funds. According to the PBGC, the plan was projected to become insolvent in 2041. According to Local 111’s Form 5500 for plan year 2022, the plan had $55 million in assets and $51 million in liabilities.

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In addition, the Marine Carpenters Fund, a Pleasanton, California-based plan with 1,198 participants in the construction industry, will receive $34.6 million in SFA financing. The pension fund was projected to become insolvent in 2034.

The PBGC also granted financing to the United Food and Commercial Workers Union and Participating Food Industry Employers Tri-State Penson Plan, which will receive $684.4 million. The Plymouth Meeting, Pennsylvania-based plan, which was projected to become insolvent in 2028, has 29,322 participants.

Approximately $75.5 million was granted to the I.B.E.W Pacific Coast Pension Fund. The Tacoma. Washington-based fund covers 3,318 participants in the construction industry. The plan had $228 million in assets as of plan year 2022, according to the fund’s Form 5500, and a funded status of 63%.

The PBGC has approved $69.5 billion in special financial assistance for pension funds covering 1.2 million beneficiaries, according to a November 1 news release.

The SFA Program was enacted as part of the American Rescue Plan Act of 2021.

Pension funds that receive SFA funds must monitor earnings from the grant money as separate from other sources of funding. The PBGC requires that at least two-thirds of the money it provides be invested in “high-quality fixed income investments.” The Final Rule on Special Financial Assistance, issued in July 2022, states that the other third can be invested in “return-seeking investments,” such as stocks and stock funds.

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