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 805 Pension and Retirement Plan (Local 805 Plan). The plan, based in New York City, New York, covers 2,003 participants in the transportation industry.
On January 1, 2019, the Local 805 Plan implemented a benefit suspension under the Multiemployer Pension Reform Act of 2014 (MPRA) and was partitioned into two plans. The MPRA suspension reduced participants’ benefits earned as of December 31, 2018, by the maximum amount allowed under MPRA. Benefits of about 1,500 plan participants were reduced, on average, by 41 percent.
PBGC’s approval of the SFA application rescinds the partition and enables the plan to restore all 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 $118.3 million in SFA, including interest to the expected date of payment to the plan.
“The Special Financial Assistance approved today means that these 2,003 transportation workers and retirees will receive the full retirement benefits they earned,” said U.S. Secretary of Labor Marty Walsh, chair of the Pension Benefit Guaranty Corporation’s Board of Directors. “Since 2019, they have been receiving reduced pension payments through no fault of their own. Today’s action, made possible by President Biden’s American Rescue Plan, restores those benefits and delivers the secure retirement they were promised.”
In addition to the $118.3 million of SFA paid to the plan, PBGC’s Multiemployer Insurance Program will be repaid $17.8 million, which is the amount of the plan’s outstanding loans, including interest, for the financial assistance PBGC provided beginning in January 2019 and ending on the expected date of payment of SFA to the plan.
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