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Compliance October 28, 2014
PBGC Steps In To Assist Struggling Multiemployer Plans
October 28, 2014 (PLANSPONSOR.com) — The Pension Benefit Guaranty Corporation (PBGC) has sent an initial installment of more than $284,000 to cover benefits for 365 people in two insolvent multiemployer plans in New York.
Reported by PLANSPONSOR staff
The agency sent about $108,100 to pay benefits for 184 current and retired transportation workers covered under the Teamsters Local 531 Pension Plan based in Brooklyn. The plan notified PBGC that it was running out of money on July 29, 2013. The agency estimates the total financial commitment to the plan at more than $14.9 million.
PBGC also sent $176,000 to cover benefits for 181 current and former longshoremen under the Local 976 International Longshoremen’s Association Pension Fund in Manhattan. The plan notified PBGC that it was insolvent on Feb. 27, 2014. The agency estimates the total financial commitment to the plan at more than $9.8 million.
The PBGC says it distributed the funds because these plans have run out of money and are unable to pay promised benefits. Quarterly payments will be sent to both plans to pay PBGC guaranteed benefits for current and future retirees.
Unlike the agency’s program for single-employer pensions, the PBGC doesn’t assume responsibility for insolvent multiemployer plans. Instead, the agency sends financial assistance so the plans can pay benefits at no more than the PBGC guarantee level.