Post by punisher on Jul 14, 2021 20:38:17 GMT -5
Dear Participant:
On July 9, 2021, the Pension Benefit Guaranty Corporation (“PBGC”) issued an interim final
rule outlining its Special Financial Assistance Program for multiemployer pension plans
under the American Rescue Plan Act of 2021 (“ARPA”). This is the additional guidance we
anticipated following the passage of ARPA earlier this year – see our March 17, 2021
communication on this topic. The government’s process will continue to take time, but the
PBGC’s interim final rule acknowledges this and contains provisions that seek to protect the
interests of funds and their participants. As indicated previously, we remain cautiously
optimistic that this is a positive development for the Fund and its participants.
PBGC’s interim final rule is extensive (approximately 125 pages) and provides important
information on a number of topics. Those topics include the timing of applications for
special financial assistance (“SFA”), the requirements for SFA applications, the calculation
of SFA, and the restoration of benefits suspended previously under Multiemployer Pension
Reform Act (“MPRA”). We now have clarity on the following:
• PBGC has established seven “Priority Groups” that categorize funds based on
certain criteria. The Fund falls in “Priority Group 2” along with others that
previously suspended benefits under MPRA. Priority Group 1 funds are those that
either are insolvent or projected to go insolvent by March 11, 2022.
• PBGC is only accepting applications from Priority Group 1 at this time.
• PBGC will open the application process for Priority Group 2 funds on January 1,
2022.
• PBGC will approve or deny an application for SFA within 120 days of filing the
application.
• PBGC generally will pay SFA within 90 days of approving a fund’s application.
The interim final rule also makes the following clear with respect to benefits previously
suspended under MPRA:
• If an application is approved and SFA is paid to a fund, benefits suspended under
MPRA will be restored.
• The restoration of suspended benefits is both retroactive and prospective, meaning
that participants will be repaid for benefits reduced previously and have benefits
restored to pre-suspension levels going forward.
• The retroactive repayment of suspended benefits can be accomplished through a
single lump sum payment within three months of the fund receiving SFA or in
installments over a five-year period.
We plan to monitor PBGC’s application process closely, in the event PBGC opens the process
to Priority Group 2 funds prior to January 1, 2022. We also will continue to keep you
informed by providing additional information and updates on the NYS Fund website at
www.nystpensionfund.org rather than by mail.
Sincerely,
Board of Trustees
On July 9, 2021, the Pension Benefit Guaranty Corporation (“PBGC”) issued an interim final
rule outlining its Special Financial Assistance Program for multiemployer pension plans
under the American Rescue Plan Act of 2021 (“ARPA”). This is the additional guidance we
anticipated following the passage of ARPA earlier this year – see our March 17, 2021
communication on this topic. The government’s process will continue to take time, but the
PBGC’s interim final rule acknowledges this and contains provisions that seek to protect the
interests of funds and their participants. As indicated previously, we remain cautiously
optimistic that this is a positive development for the Fund and its participants.
PBGC’s interim final rule is extensive (approximately 125 pages) and provides important
information on a number of topics. Those topics include the timing of applications for
special financial assistance (“SFA”), the requirements for SFA applications, the calculation
of SFA, and the restoration of benefits suspended previously under Multiemployer Pension
Reform Act (“MPRA”). We now have clarity on the following:
• PBGC has established seven “Priority Groups” that categorize funds based on
certain criteria. The Fund falls in “Priority Group 2” along with others that
previously suspended benefits under MPRA. Priority Group 1 funds are those that
either are insolvent or projected to go insolvent by March 11, 2022.
• PBGC is only accepting applications from Priority Group 1 at this time.
• PBGC will open the application process for Priority Group 2 funds on January 1,
2022.
• PBGC will approve or deny an application for SFA within 120 days of filing the
application.
• PBGC generally will pay SFA within 90 days of approving a fund’s application.
The interim final rule also makes the following clear with respect to benefits previously
suspended under MPRA:
• If an application is approved and SFA is paid to a fund, benefits suspended under
MPRA will be restored.
• The restoration of suspended benefits is both retroactive and prospective, meaning
that participants will be repaid for benefits reduced previously and have benefits
restored to pre-suspension levels going forward.
• The retroactive repayment of suspended benefits can be accomplished through a
single lump sum payment within three months of the fund receiving SFA or in
installments over a five-year period.
We plan to monitor PBGC’s application process closely, in the event PBGC opens the process
to Priority Group 2 funds prior to January 1, 2022. We also will continue to keep you
informed by providing additional information and updates on the NYS Fund website at
www.nystpensionfund.org rather than by mail.
Sincerely,
Board of Trustees