The Pension Benefit Guaranty Corp. has approved two more applications for a federal assistance program that assists struggling multiemployer plans.
Bricklayers and Allied Craftworkers Local 5 New York Retirement Fund Pension Plan, Newburgh, N.Y., will receive about $62 million and Road Carriers Local 707 Pension Plan, Hempstead, N.Y., will receive $726 million under the Special Financial Assistance Program, the PBGC said in respective news releases Tuesday and Wednesday.
The plans are the second and third to be approved for assistance by the PBGC,
Under the program, created by the American Rescue Plan Act, which Democrats in Congress passed and President Joe Biden signed into law in March 2021, a multiemployer plan is eligible for assistance if it satisfied 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; 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 has not been terminated.
The PBGC began providing financial assistance to the Local 707 plan, which covers 3,804 participants in the transportation industry, in 2017 when the plan went insolvent. At that time, the Local 707 plan reduced participants' benefits, affecting more than 90% of the plan's retirees while 44% of the retirees and beneficiaries had benefit reductions of more than 50%, according to the PBGC.
As of Jan. 31, 2021, the Local 707 plan had $4.8 million in assets and $802 million in projected benefit obligations, according to the plan's most recent Form 5500 filing.
Also, PBGC's multiemployer program will be repaid $87 million, which is the amount of the plan's outstanding loans for the financial assistance PBGC provided beginning in 2017, the agency noted.
The Bricklayers Local 5 Plan covers 821 participants in the construction industry and was projected to run out of money in 2022. As of Dec. 31, 2020, the plan had $9 million in assets and $77.6 million in projected benefit obligations, according to the plan's most recent Form 5500 filing.
The PBGC approved the first plan for special financial assistance in December. On Tuesday, it announced that plan — Local 138 Pension Plan, Baldwin, N.Y. — received $112.6 million in special financial assistance.
