The Pension Benefit Guaranty Corporation granted $3.2 million to the Plasterers and Cement Masons Local No. 94 Pension Fund via the PBGC’s Special Financial Assistance Program on Tuesday. The Camp Hill, Pennsylvania-based fund covers 108 participants in the construction industry.
In May 2019, under the Multiemployer Pension Reform Act of 2014, the plan cut benefits to 70 participants by 40% due to underfunding and, at the same time, was partitioned into two plans. According to the fund’s Form 5500, it was 23.8% funded at the end of 2018.
The grant from the Special Financial Assistance Program enables the plans to merge back into one, make back payments to participants and ensure solvency through 2051. Additional special financial assistance will also be provided to repay the PBGC about $661,000 in outstanding loans it has extended to the plan since 2019.
At the end of 2018, the plan had 26 active participants, 38 retired participants receiving benefits and 21 entitled to benefits in the future.
The SFA provision of the American Rescue Plan Act allows for PBGC funding for severely underfunded multiemployer pension plans. Funds that receive assistance must monitor the interest resulting from the grant money as separate from other sources of funding. The PBGC requires that at least two-thirds of the money it provides be invested in “high-quality fixed income investments.” The Final Rule on Special Financial Assistance, issued in July 2022, states that the other third can be invested in “return-seeking investments,” such as stocks and stock funds.