The Pension Benefit Guaranty Corporation has approved two more applications to bailout multiemployer pension plans under the Special Financial Assistance Program—this time to the Local 584 Pension Plan and the Milk Industry Office Employees Pension Plan, both of New York City.
The Local 584 Pension Plan, which began receiving PBGC financial aid when it became insolvent in July, covers 2,172 participants in the transportation industry. The plan reduced participants’ benefits as required by law to the PBGC guarantee levels, which was approximately 50% below the benefits payable under the terms of the plan.
The approval of the SFA application means the plan can restore all benefit reductions caused by its insolvency and make payments to retirees to cover prior benefit reductions. The plan will receive $224.6 million, including interest. Additionally, PBGC’s Multiemployer Insurance Program will be repaid the $5.2 million in financial assistance the program has provided since July so the plan could pay outstanding loans, plus interest.
The Milk Industry pension plan, which covers only 78 participants, has been insolvent since January 2017, at which time the PBGC started providing financial assistance. The reduced benefits for participants were approximately 20% below the benefits payable under the terms of the plan.
Under the SFA program, the plan will receive $6.6 million in funding, including interest to restore all benefit reductions that resulted from its insolvency, and to cover prior reductions. Meanwhile, the Multiemployer Insurance Program will be repaid $1.6 million for the financial assistance it has provided for more than five years to cover the pension plan’s outstanding loans, plus interest.
The PBGC also refiled a $2.8 million lien against Times Publishing Company over the company’s insolvent pension plan, which covers approximately 3,300 former and retired Tampa Bay Times employees, according to Florida Politics.
Last November, the PBGC began taking steps to take responsibility over the plan, as the agency warned participants that it would terminate at the end of that month.
“PBGC is taking this action because your plan meets the criteria for termination under federal pension law,” the PBGC said in a letter to plan participants and beneficiaries in November. “This means that the plan doesn’t have enough money to pay all the promised benefits and your employer is financially unable to keep up the plan. The plan will terminate as of November 30, 2021. As of that date, you will not earn any further benefits from the plan.”
An attorney for the company told Florida Politics that the PBGC has taken responsibility for the Times pension plan and the investments to support it. “The company is in discussion with the PBGC about its future financial support for the plan,” Times attorney Katie Kohn said.
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Tags: Bailout, Local 584 Pension Plan, Milk Industry Office Employees Pension Plan, multiemployer plan, PBGC, Pension Benefit Guaranty Corporation, SFA, Special Financial Assistance Program, Tampa Bay Times, Times Publishing Company