The Pension Benefit Guaranty Corp. has awarded a multiemployer plan facing insolvency approximately $868.8 million in special financial assistance.
The Legacy Plan of the UNITE HERE Retirement Fund, which is based in White Plains, N.Y., and covers 91,744 retirement plan participants in the hospitality industry, was projected to run out of money in 2030, according to a Jan. 15 announcement from the PBGC.
UNITE HERE is a labor union with members in the U.S. and Canada working in the hotel, casino, airports, food service, textile manufacturing and distribution, and transportation industries.
Without the SFA Program, the UNITE HERE fund would have been required to reduce participants’ benefits to the PBGC guarantee levels upon plan insolvency, which is roughly 15% below the benefits payable under the terms of the plan, the PBGC noted.
The plan had a funding ratio of 27% with $2.2 billion in projected benefit obligations as of Jan. 1, 2023, according to the plan's most recent Form 5500 filing. As of Dec. 31, 2023, the plan had $585 million in assets, the filing showed.
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.
As of Jan. 15, the PBGC had approved about $70.9billion in SFA to plans that cover about 1.3 million workers, retirees and beneficiaries.