In Second Bailout Within A Week, PBGC Gives Failing Ohio Teamster Pension Plan $85 Million
In Second Bailout Within A Week, PBGC Gives Failing Ohio Teamster Pension Plan $85 Million
On the heels of the Pension Benefit Guaranty Corporation (PBGC) announcing it would be giving nearly $1 billion to the underfunded New York State Teamsters Conference Pension and Retirement Plan (NYS Teamsters Conference Plan), the PBGC announced on Tuesday that it would be doling out nearly $85 million to a failing Teamsters pension fund in Ohio.
The Pension Benefit Guaranty Corporation approved on Tuesday an application for Special Financial Assistance of $84.9 million to the Teamsters Local Union No. 52 Pension Plan, based in Valley View, Ohio.
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 also only accepts investment-grade bonds as an investment for the funds it provides.
The pension plan covers 769 participants in the transportation industry. The plan expected to run out of money some time in 2023, after which the pension would be turned over to the PBGC, and participants would have been paid approximately 60% less than what the pension was originally supposed to pay. [Emphasis added.]
The announcement comes a mere four days after the PBGC announced it would be giving nearly $1 billion to the New York State Teamsters Conference Pension and Retirement Plan which, before the bailout, had been “paying approximately $280 million per year in benefits, but only receiving approximately $120 million in contributions,” states the Plan’s website, and was expecting to run out of money in 2027.
The billions of taxpayer-funds being handed out by the PBGC were made possible by the $1.9 trillion American Rescue Plan, which passed along a party line vote and was signed by President Biden in 2021 and included an $86 billion bailout to failing union pension plans.
Related:
PBGC: Underfunded New York State Teamsters Pension Plan Will Receive $963 Million
PBGC bails out Freight Drivers Pension Plan, expected to run out of money in 2023