We are monitoring closely the application filings for Special Financial Assistance (SFA) under ARPA which began with Group 1 eligible plans in July 2021. Group 1 plans were those pension funds that were already insolvent or those that were forecast to become insolvent before March 2022. To date, 18 Group 1 plans have filed an application. I reached out to the PBGC to see if all the eligible plans in that Group had been filed and they let me know that they don’t have a complete list of all eligible plans and they only know in what Priority Group a pension system is once the application has been processed. However, my contact did estimate that roughly 80% of the Group 1 eligible plans have filed an application with the PBGC.
As a reminder, the ARPA legislation states:
APPLICATION DEADLINE.—Any application by a plan for special financial assistance under this section shall be submitted to the corporation (and, in the case of a plan to which section 432(k)(1)(D) of the Internal Revenue Code of 1986 applies, to the Secretary of the Treasury) no later than December 31, 2025, and any revised application for special financial assistance shall be submitted no later than December 31, 2026.
There is no penalty for filing an application after the next Priority Group begins but as the language specifies, new applications must be submitted by December 31, 2025. I’m sure that these plans have their reasons for not yet processing an application, but personally, I’d want to get the SFA as soon as possible and have it begin working for my plan and participants. More to come!
I know it’s not politically correct to admit shortcomings, but it’s at a point where someone is asleep at the switch. You would think the funds would be more transparent like Kevin with 707. I was under the impression that a revised application was just a correction of a few things and you don’t fall off the map. 641 is stuck on the Garden State Parkway.
Hey Ray – If you are comparing this process to being stuck on the GSP then we could be waiting a LONG time! I’m not sure why it takes so long other than not having enough personnel participating in this process. Let’s hope that things open up soon and we get the final guidelines so everyone can get to work. Hope that you are doing well. Russ
Hey Ray – I hope that you are doing well. I’m not hearing anything from Washington regarding additional guidance from the PBGC. Are you? The pace of filing SFA applications is painfully slow. All the best, Russ
Indeed,it’s been a couple of silent weeks for 641’s stated position on this approval and distribution process. Seems that taking promotions took priority for the decision makers.
Please get on with it.
Thanks, I’m a concerned 641 retiree
Indeed,641 has been put off for 3 weeks now. I’m assuming that the appointment of promotions to the decision board members was a priority above the approval and distribution confirmation of the other locals pensions but since that’s done please, get on with it already.
Thanks, I’m a concerned 641 retiree
Good afternoon. I’m sure that you are both concerned and frustrated. I certainly would be, too. Your plan is looking at a potential $500 million SFA. Hopefully, the plan’s application will be approved by the March 31st target date and received soon thereafter. What happens next is critical. Hopefully, your plan’s trustees and advisors will manage the SFA assets in a way that truly SECURES the promises for as long as possible. Market risk should be taken with the legacy assets and future contributions since the liquidity to meet benefits and expenses will come from the segregated SFA bucket. Have a great afternoon and son’t hesitate to reach out to me if I can provide additional perspective. Russ