July 2022: PBGC Finally Publishes Final Rule On Special Financial Assistance Program

Update Applicable to:
All employers of multiple businesses.

What happened?
On July 8, 2022, the Pension Benefit Guaranty Corporation (“PBGC”) published its final rule (“Final Rule”) on the Special Financial Assistance (“SFA”) Program established under the American Rescue Plan Act of 2021 (“ARPA”).

What are the details?
Under the SFA Program, a financially troubled multi-employer pension plan may receive a one-time lump sum payment intended to pay all benefits due from the date the SFA payment is received through the last day of the plan year ending in 2051. We previously wrote about the IFR and explained the various eligibility conditions for SFA and the calculations involved.

The following is a high-level summary of the key changes and developments from the Final Rule.

• Separate Interest Rate Assumptions for SFA and Non-SFA Assets
• Investment of SFA Assets
• MPRA Plans
• Retroactive Benefit Increases
• Merger Involving SFA Plans
• Transfer From SFA Plan To Health Plan
• Withdrawal Liability
• SFA Measurement Date and Lock-In Applications

This new program will go into effect on August 8, 2022.

For more information, please see the links below:

Final Rule

Article 1 – Article 2

What do employers need to do?
Employers should review the links above and may want to adjust their health plans to ensure they comply with the law.