By: Russ Kamp, Managing Director, Ryan ALM, Inc.
The PBGC certainly didn’t let the upcoming holiday season get in the way of some important business. As we mentioned in last week’s update, there was a potential “tidal wave” of activity facing the PBGC team, as one revised application and 11 supplemental submissions were reaching the 120-day threshold for action. The one revised application was the mammoth Central States plan that received approval for nearly $36 billion in Special Financial Assistance (SFA). The SFA payout is slightly more than $100,000 per plan participant (357,056) and it goes a long way to establishing a firmer financial footing.
The 11 supplemental plans each received approval for their applications. In total, these plans will receive an additional $704 million covering 101,860 plan participants. To date, $45.4 billion has been allocated to 37 pension plans, with Central States representing roughly 80% of the SFA payout to date. Estimates vary as to the ultimate SFA payout, but a safe guess would be that at least 50% of the ARPA proceeds have been allocated and disbursed.
In addition to the activity mentioned above, the New York State Teamsters Conference Pension and Retirement Fund submitted a supplemental application seeking an additional $421.3 million for their 33,643 plan participants. This fund had previously received $963 million as a Priority Group 2 plan. Also, there are two more funds, Teamsters Local 617 Pension Plan and the Graphic Arts Industry Joint Pension Plan, whose supplemental applications are hitting the 120-day window for PBGC action during the next week.
Finally, congratulations to all of those individuals and organizations that worked tirelessly during the last decade-plus to secure the funds necessary to secure the Central States pension system. It would have been so easy to throw in the towel by using MPRA to slash the promised benefits. As a result of this effort, many Americans will once again receive the promised benefits allowing them to begin a more dignified retirement. Great job!