The Pension Benefit Guaranty Corp. approved $76 million in special financial assistance for a Baltimore-based multiemployer pension plan that previously reduced benefits for its participants.
The Ironworkers Local Union No. 16 Pension Plan, which represents 996 participants in the construction industry, will receive the funding under the Special Financial Assistance Program, the PBGC announced in a news release Wednesday.
The SFA Program was created as part of the American Rescue Plan, which passed in March 2021, as a way to help troubled multiemployer plans.
On Oct. 1, 2018, the Ironworkers pension fund reduced benefits by an average of 25% for 680 plan participants, under the terms of the Multiemployer Pension Reform Act of 2014, in order to address its financial problems and projected insolvency, the PBGC said.
The MPRA established a new process for multiemployer plans to propose a reduction in benefits if a plan is projected to face insolvency. Plans must submit an application to the Treasury Department, and if the department decides to approve it, in consultation with the Labor Department and PBGC, then plan participants and beneficiaries can vote on the proposed reductions before they begin.
The PBGC's approval of special financial assistance will allow the Ironworkers Local Union No. 16 Pension Plan to restore benefits, make payments to cover prior benefit reductions, and pay benefits without reduction for many years into the future, according to the news release.
The plan had a funding ratio of 46.1% with nearly $154 million in projected benefit obligations as of Jan. 1, 2021, according to the plan's most recent Form 5500 Filing. As of Dec. 31, 2021, the plan had $79 million in assets, the filing showed.
As of Wednesday, the PBGC had approved roughly $53.1 billion in special financial assistance to plans covering 764,000 workers, retirees and beneficiaries.