By: Russ Kamp, Managing Director, Ryan ALM, Inc.
When multiemployer pension funds submit an application for Special Financial Assistance (SFA), the PBGC has 120 days to act on said application. It just so happens that there are 12 applications that are hitting the 120-day threshold this week with 7 of those slated for today (12/6). This is potentially a tidal wave of activity for the PBGC, which has been handling 1-2 a week, at most. Based on the PBGC’s files, 11 of the 12 applications are supplementing previous submissions. The one non-supplemental application is the massive Central States, Southeast & Southwest Areas Pension Plan, which is seeking nearly $35 billion in SFA support for its roughly 365,000 participants. To put the size of the Central States’ request into perspective, the $35 billion is nearly 4 times greater than the $8.9 billion paid out to date, and it represents just under 40% of the anticipated SFA distributions for the whole ARPA program.
We believe that the applications are approved if no action is taken within the 120 periods. It could be an exhausting week for the team at the PBGC. In any case, it will be a great week for those plans that have asked for additional resources to support the promises made to the plan participants.