The Pension Benefit Guaranty Corp. approved supplemental special financial assistance applications totaling $407 million to aid two struggling multiemployer pension plans.
The United Independent Union-Newspaper Guild of Greater Philadelphia Pension Plan, or UIU-NPG plan, will receive about $296 million, while the Bakery Drivers and Salesmen Local 194 and Industry Pension Fund will receive about $111 million under the Special Financial Assistance Program, the PBGC announced Thursday.
Created by the American Rescue Plan Act that Democrats passed in March 2021, the SFA Program is designed to shore up struggling multiemployer pension plans through 2051.
The UIU-NPG plan, based in Philadelphia, covers 2,566 participants in the printing industry and was projected to run out of money in 2025. Without the SFA Program, the plan would have been required to reduce participants’ benefits to the PBGC guarantee levels upon plan insolvency, which is roughly 50% below the benefits payable under the terms of the plan, according to a PBGC news release.
The Bakery Drivers Local 194 Plan, based in North Brunswick, N.J., covers 1,155 participants in the transportation industry. It was projected to run out of money in 2024 and at that time would have been required to reduce participants’ benefits to the PBGC guarantee levels, which is roughly 45% below the benefits payable under the terms of the plan, the PBGC said.
The UIU-NPG plan had a funding ratio of 24% with $387 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 $86 million in assets, the filing shows.
The Bakery Drivers Local 194 Plan had a funding ratio of 37% with $96 million in projected benefit obligations and $36 million in assets as of Oct. 31, 2021, according to the plan’s most recent Form 5500 filing.
As of Thursday, the PBGC has approved more $46.7 billion in special financial assistance to plans that cover nearly 557,000 workers, retirees and beneficiaries, the PBGC said.