PBGC Approves $23.6M Grant to Midwestern Teamsters’ Pension Fund

Special financial assistance funds will preserve pension benefits for 615 transportation-industry participants.



The Pension Benefit Guaranty Corporation announced Wednesday that it will provide a $23.6 million special financial assistance grant to the Midwestern Teamsters Pension Fund.

The plan, based in Oak Brook, Illinois, covers 615 participants and beneficiaries and was projected to become insolvent in 2032 without the grant funding.

Without the funds from the Special Financial Assistance Program, the Midwestern Teamsters Plan would have been required to reduce participants’ benefits to the PBGC guarantee levels upon plan insolvency, roughly 20% less than the benefits payable under the terms of the plan, according to the PBGC’s announcement.

Another Teamsters union plan, the Central States, Southeast and Southwest Areas Pension Plan, in 2022, received one of the largest SFA grants at more than $35 billion, of which it this year repaid $127 million that it mistakenly received as a result of the inclusion of deceased participants in the pension fund’s initial SFA application.

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The SFA Program 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.

The SFA Program was enacted as part of the American Rescue Plan Act of 2021. As of October 23, 2024, the PBGC has announced approval of about $68.6 billion in special financial assistance to plans that cover more than 1.18 million workers, retirees and beneficiaries.

Pension funds that receive SFA funds 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.

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