The Pension Benefit Guaranty Corporation approved a Special Financial Assistance program from a Metal Sheet Workers local pension plan in Massillon, Ohio, on Wednesday.
The plan covered 1,649 participants in the sheet metal trade. About 850 of them saw their benefits cut an average of 24% in May 2020 under the terms of the Multiemployer Pension Reforms Act of 2014. SFA will pay $28.8 million to make up the shortfall.
The MPRA allowed trustees of multiemployer plans to submit an application to the Treasury Department to reduce pension payouts if such a reduction is necessary to prevent the fund from running out of money.
Secretary of Labor Marty Walsh explained: “The Special Financial Assistance approved today means that these 1,649 construction workers and retirees will receive the full retirement benefits they earned. Since 2020, they have been receiving reduced pension payments through no fault of their own.”
The SFA program was passed as part of the American Rescue Plan Act. The Act provided funding for struggling multiemployer pension plans. As of today, PBGC has approved almost $7.8 billion to plans covering 156,000 people.
In order to receive SFA funds, the plan administrators must monitor the money they receive as well as investment earnings separately from other funds. It also requires that funds only invest the money in investment grade bonds.
The Metal Sheet Workers National Pension Fund did not return a request for comment.