The Pension Benefit Guaranty Corporation (PBGC) announced today that it has approved the application submitted to the Special Financial Assistance (SFA) Program by the Local 584 Pension Plan (Local 584 Plan). The plan, based in New York City, New York, covers 2,172 participants in the transportation industry.
The Local 584 Plan became insolvent in July 2021. At that time, PBGC started providing financial assistance to the plan. As required by law, the Local 584 Plan reduced participants’ benefits to the PBGC guarantee levels, which was roughly 50 percent below the benefits payable under the terms of the plan.
PBGC’s approval of the SFA application enables the plan to restore all benefit reductions caused by the plan’s insolvency and to make payments to retirees to cover prior benefit reductions. SFA will enable the plan to pay retirement benefits without reduction for many years into the future. The plan will receive $224.6 million in SFA, including interest to the expected date of payment to the plan.
“Without this Special Financial Assistance, these 2,172 transportation workers would not receive the retirement benefits they have earned through years of hard work,” said U.S. Secretary of Labor Marty Walsh, chair of the Pension Benefit Guaranty Corporation’s Board of Directors. “With funding from President Biden’s American Rescue Plan, these workers now have the assurance of the secure retirement they deserve.”
In addition to the $224.6 million of SFA paid to the plan, PBGC’s Multiemployer Insurance Program will be repaid $5.2 million, which is the amount of the plan’s outstanding loans, including interest, for the financial assistance PBGC provided beginning in July 2021 and ending on the expected date of payment of SFA to the plan.
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