Construction Pension With 666 Participants Rescued by PBGC

The Arizona Bricklayer’s pension will now remain solvent through 2051.

The Pension Benefit Guaranty Corporation issued a special financial assistance grant to the Arizona Bricklayer’s Pension Trust Fund totaling $10.6 million.

The Phoenix, Arizona-based fund covers 666 participants in the construction industry. The pension fund was expected to become insolvent in 2041 absent assistance from the PBGC. At that time, a benefit cut of 20% would have been implemented.

According to the pension fund’s Form 5500 from the end of 2019, the most recent form available, the plan had 54 active participants, 259 retired, 300 entitled to benefits in the future, and 67 surviving beneficiaries. The fund was 57.03% funded at that time.

The SFA provision of the American Rescue Plan Act allows for PBGC funding for severely underfunded multiemployer pension plans. Grants are calculated to ensure plan solvency through 2051.

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Pension 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.