WASHINGTON, D.C. — The Pension Benefit Guaranty Corporation (PBGC) recently announced that it has approved the application submitted to the Special Financial Assistance (SFA) Program by the National Integrated Group Pension Plan (National Integrated Group Plan). The plan, based in Scranton, Pa., covers 48,254 participants in the manufacturing industry.
The National Integrated Group Plan will receive approximately $887.1 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 2034. Without the SFA Program, the National Integrated Group Plan 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. SFA will enable the plan to continue to pay retirement benefits without reduction for many years into the future.
“These 48,254 manufacturing workers went to work with the promise of a pension when they retired. Today, the Biden-Harris Administration has fulfilled that promise,” said Assistant Secretary of Labor for Employee Benefits Security Lisa M. Gomez.
“Under President Biden’s leadership, the National Integrated Group Plan received Special Financial Assistance to deliver the pensions that these manufacturing workers have earned.”
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 multi-employer 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 multi-employer plans that receive SFA.
As of June 29, 2023, PBGC has approved about $49.7 billion in SFA to plans that cover over 687,000 workers, retirees, and beneficiaries.
The SFA Program operates under a final rule, published in the Federal Register on July 8, 2022, which became effective Aug. 8, 2022, and was amended effective Jan. 26, 2023.
About PBGC
PBGC protects the retirement security of over 33 million American workers, retirees, and beneficiaries in both single-employer and multi-employer private sector pension plans. The agency’s two insurance programs are legally separate and operationally and financially independent. PBGC is directly responsible for the benefits of more than 1.5 million participants and beneficiaries in failed pension plans. The Single-Employer Program is financed by insurance premiums, investment income, and assets and recoveries from failed single-employer plans. The Multi-employer Program is financed by insurance premiums. Special financial assistance for financially troubled multi-employer plans is financed by general taxpayer monies.