By: Russ Kamp, CEO, Ryan ALM, Inc.

Regular followers of this blog know that I provide a weekly update on the ARPA pension legislation and the PBGC’s progress implementing this critical support for multiemployer pension plans. We reported way back in January 2023 that the Bakery Drivers Local 550 and Industry Pension Fund’s application seeking Special Financial Assistance (SFA) had been denied due to ineligibility. We also reported that the Bakery Drivers had submitted a revised application on May 30, 2025. We observed at the time that unlike all the other applications that had been submitted, this one did not have a 120-day window for the PBGC to act on the submission. We now know why.

The Bakers were cooking up an argument that was presented to the courts on why their application seeking SFA was appropriate and they were right. “The U.S. 2nd Circuit Court of Appeals says that a multiemployer pension plan that qualifies for a grant under the Pension Benefit Guaranty Corporation’s (PBGC) Special Financial Assistance (SFA) program cannot be excluded just because that plan was previously terminated.”

“Because we do not read the pertinent provision of the SFA statute to exclude plans based solely on a prior termination,” the court ruled, the plan should be eligible for a SFA grant. As a result, the court ruled in favor of the fund, “vacated the PBGC’s denial and remanded the application to the PBGC for reconsideration.”

A little history. The Bakery Drivers Local 550 and Industry Pension Fund, a fund based in Floral Park, NY. The plan covered 1,094 participants in 2022 and was 6.3% funded, according to their Form 5500. Regrettably, the plan terminated in 2016 by mass withdrawal after Hostess Brands, Inc., its largest contributor, went bankrupt. However, the court stated, that despite terminating in 2016, the plan “continued to perform audits, conduct valuations, file annual reports, and make payments to more than 1,100 beneficiaries.”

The court ruled that the statute said that any multiemployer plan that was in critical and declining status from 2020 to 2022 was potentially eligible, and the plan was in critical and declining status in Sept. 2022 when it applied. Importantly, “these provisions do not, by their terms, exclude a plan that was terminated by mass withdrawal.”

According to the PBGC’s status of applications weekly report, the United Food and Commercial Workers Unions and Employers Pension Plan, a non-priority group member, is the only other applicant to have its submission denied due to ineligibility. I wonder if they will have a similar argument as the Bakery Drivers. More to come.