PBGC: Underfunded New York State Teamsters Pension Plan Will Receive $963 Million
PBGC: Underfunded New York State Teamsters Pension Plan Will Receive $963 Million
President Biden’s $1.9 trillion American Rescue Plan will help save nearly 34K Teamsters and their beneficiaries from reduced benefits
On Friday, the Pension Benefit Guaranty Corporation (PBGC) announced that it approved an application submitted to the Special Financial Assistance (SFA) Program by the New York State Teamsters Conference Pension and Retirement Plan (NYS Teamsters Conference Plan) to provide $963.4 million from taxpayers.
As the work force ages, an alarming number of the plans are running out of money. The trend predated the pandemic and is a result of fading unions, serial bankruptcies and the misplaced hope that investment income would foot most of the bill so that employers and workers wouldn’t have to. — New York Times
The plan, based in Syracuse, New York, covers 33,643 participants in the transportation industry, according to the PBGC.
On October 1, 2017, the NYS Teamsters Conference Plan implemented a benefit suspension under the terms of the Multiemployer Pension Reform Act of 2014 (MPRA). The plan reduced benefits of about 25,000 plan participants. On average, affected participants’ benefit were reduced by 20 percent.
PBGC’s approval of the SFA application enables the plan to restore benefits suspended under the terms of MPRA and to make payments to retirees to cover prior benefit suspensions. SFA will enable the plan to pay retirement benefits without reduction for many years into the future. The plan will receive $963.4 million in SFA, including interest to the expected date of payment to the plan.
“President Biden’s American Rescue Plan will deliver Special Financial Assistance to the New York State Teamsters Conference Pension Plan that ensures the 33,643 transportation workers and retirees covered by this plan will receive the retirement benefits they have earned,” said U.S. Secretary of Labor Marty Walsh, chair of the Pension Benefit Guaranty Corporation Board of Directors. “This assistance will deliver the secure retirement these workers were promised in return for many years of hard work.”
The $1.9 trillion American Rescue Plan—passed along a party line vote and signed by President Biden in 2021—provided an $86 billion bailout to failing union pension plans.
However, as of October, the Congressional Budget Office (CBO) told lawmakers that another $4.5 billion would be needed.
Under the Special Financial Assistance (SFA) program, pension plans are not obligated to repay the moneys received from the PBGC.
As of November 18, 2022, according to the PBGC, nearly $8.9 billion has been given to plans that cover over 191,000 workers, retirees, and beneficiaries.