The Pension Benefit Guaranty Corp. approved $334 million in special financial assistance Thursday for a struggling multiemployer plan in the transportation industry.
The Local Union No. 863 I.B. of T. Pension Plan, which covers 2,487 participants in the transportation industry, will receive the funds through the SFA program, the PBGC said in a Thursday news release.
The Mountainside, New Jersey-based plan was projected to face insolvency in 2024, and upon insolvency, it would have had to reduce benefits to roughly 75% below the benefits payable under the terms of the plan, the news release stated. However, with the SFA program, the plan will be able to pay retirement benefits without reduction for many years into the future, the PBGC said.
"These hard-working Teamsters helped build a better America and now the Biden-Harris administration is working to deliver the secure, dignified retirement they deserve," said Acting Secretary of Labor Julie A. Su in the news release.
The SFA program was created under the American Rescue Plan, which passed in March 2021, as a way to aid multiemployer plans that are struggling financially.
The Local Union No. 863 I.B. of T. Pension Plan had a funding ratio of 13.67% with nearly $599 million in projected benefit obligations as of Sept. 1, 2021, according to the plan's most recent Form 5500 filing. As of Aug. 31, 2022, the plan had $52 million in assets, the filing showed.
As of Tuesday, the PBGC had approved about $53.4 billion in special financial assistance to plans covering more than 766,000 workers, retirees and beneficiaries, the news release stated.