§1432 Special Financial Assistance by the Corporation

Summary

The corporation must give one-time special financial help to eligible multiemployer pension plans when a plan sponsor asks for it. Plans that get this help do not have to pay it back. To be eligible, a plan must meet one of four rules: be in critical and declining status in any plan year starting in 2020 through 2022; have had an approved benefit suspension as of March 11, 2021; in 2020–2022 be certified critical, have a modified funded percentage under 40% and an active-to-inactive ratio under 2 to 3; or have become insolvent after December 16, 2014 and still be insolvent and not ended as of March 11, 2021. The corporation had to issue application rules within 120 days of March 11, 2021, limit required documents, set effective dates, and offer an alternate application for plans already approved for partition before March 11, 2021. Applications must be filed by December 31, 2025 (revised applications by December 31, 2026). For up to two years after March 11, 2021, the corporation may only accept certain priority applications, such as plans already insolvent or likely to be insolvent within 5 years of March 11, 2021, plans that would need more than $1,000,000,000 in other federal payments if not helped, plans that had suspended benefits as of March 11, 2021, or similar cases. The payment is a single lump sum, paid as soon as practical after approval, and no later than one year after approval; no special payments will be made after September 30, 2030. The amount must be what the plan sponsor shows is needed to pay all benefits through the last day of the plan year ending in 2051, without cutting benefits people had earned by March 11, 2021 (unless those cuts were adopted before the plan applied). Plans must use deterministic funding projections. For interest rates and other assumptions, plans generally must use the assumptions from their most recent certification completed before January 1, 2021 (the interest rate cannot exceed the limit set by the law for the month the application is filed or the three months before, increased by 200 basis points). Plans may propose other assumption changes but must explain them and the corporation will reject unreasonable changes. Any suspended benefits must be reinstated when the special help takes effect, and past suspended amounts must be paid either as a lump sum within 3 months or in equal monthly payments over 5 years starting within 3 months, with no interest. The special funds and any earnings may only pay benefits and plan expenses, must be kept separate, and must be invested in investment-grade bonds or other allowed investments. The corporation may impose reasonable conditions on future accruals, retroactive benefit increases, asset allocation, employer contribution rates, diversion of contributions, expense allocations, and withdrawal liability, but it may not force changes to benefit reductions, plan governance, or funding rules. Plans must keep paying PBGC premiums, will be treated as in critical status through the last plan year ending in 2051, and if they later become insolvent they will follow the usual insolvency rules. The corporation must work with the Treasury Department when reviewing applications, amounts, reinstatements, or changed assumptions.