The 18 Pension plans that received approval under MPRA to file for benefit relief have been slow to file their application for Special Financial Assistance (SFA). These plans were part of Priority Group 2 under the PBGC’s pecking order that permitted filing to begin on 1/1/22. To date, only Local 805 Pension and Retirement Plan has filed its application. Given that nearly 6 months have elapsed since the PBGC announced their “Interim Final Rules” in July 2021, one would think that applications would have been filed immediately upon the designated date. That clearly hasn’t been the case.
There is some speculation that more than one of these plans may not file for the SFA given the issues related to the legislation’s implementation and the likelihood that any SFA received would not be nearly sufficient to cover the prescribed 30-year time (until 2051) frame for the securing of benefits and expenses. These plans, using MPRA, have restructured their payouts to current beneficiaries and future retirees hoping to extend that life of the plan. A “reworking” of the benefits for plans that receive the SFA may create greater headaches than those that exist today. The truly sad part of this legislative failure is the expectation that benefits were to be restored to those participants who saw in many cases draconian cuts. A decision to not file for the SFA will be devastating news to the tens of thousands of plan participants that were celebrating the passage of ARPA last March.
My hope would be that any plan that has cut benefits under MPRA should gladly accept this grant from the Federal government to restore benefits. The SFA grant won’t likely cover more than 8-10 years of benefits, but it certainly buys time for future legislative efforts to bring effective change that actually accomplishes the intended action of protecting and preserving benefit payments for the next 30-years. These poor participants have gone above and beyond in their effort to help get legislation passed. It would be a slap in their face if a decision were made to forgo the receipt of this government largesse.