WASHINGTON, D.C. — The Pension Benefit Guaranty Corporation (PBGC) announced Friday that it has approved the application submitted to the Special Financial Assistance (SFA) Program by the Southwest Ohio Regional Council of Carpenters Pension Plan (Southwest Ohio Carpenters Plan).
The plan, based in Monroe, Ohio, covers 5,399 participants in the construction industry.
On April 1, 2019, the Southwest Ohio Carpenters Plan implemented a benefit suspension under the terms of the Multi-employer Pension Reform Act of 2014 (MPRA) in order to address the plan’s troubled financial condition at that time and its projected insolvency. The plan reduced benefits of about 4,300 plan participants. On average, affected participants’ benefits were reduced by 18 percent.
PBGC’s approval of the SFA application enables the plan to restore benefits suspended under the terms of MPRA and to make payments to retirees to cover prior benefit suspensions. SFA will enable the plan to pay retirement benefits without reduction for many years into the future. The plan will receive $182.6 million in SFA, including interest to the expected date of payment to the plan.
“Millions of people work for years, looking forward to the day when the promise of a secure, dignified retirement is kept,” said Acting Secretary of Labor Julie A. Su.
“Today, the Biden-Harris administration is delivering on that promise for 5,399 construction workers across Ohio, Kentucky and Indiana by providing Special Financial Assistance to the Southwest Ohio Regional Council of Carpenters Pension Plan so that they can retire with the dignity they deserve.”
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 Aug. 15, 2023, PBGC has approved nearly $52.4 billion in SFA to plans that cover over 756,000 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 multiemployer 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 single-employer 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.