By Brian Croce
Source: Pensions & Investments
The Pension Benefit Guaranty Corp. on Wednesday unveiled a final rule for a federal assistance program that aids struggling multiemployer plans.
The Special Financial Assistance Program, created by the American Rescue Plan Act that Democrats passed in March 2021, was designed to shore up struggling multiemployer pension plans through 2051. The PBGC estimates the total cost will range from $74 billion to $91 billion.
Under the program, a multiemployer plan is eligible for assistance if it satisfies one of four criteria: it has been in critical and declining status in any plan year beginning in 2020 through 2022; it has had its benefits suspended as of March 11, 2021; it is in critical status, has a modified funding ratio below 40% and has a ratio of active-to-inactive participants of less than 2-to-3; or it became insolvent after Dec. 16, 2014, but as of March 11, 2021, it has not been terminated.