Financial Assistance to Multiemployer Pension Plans
On March 31, 2022, the Trustees of the Local 641 Pension Fund are proud to announce that our application to the Pension Benefit Guaranty Corporation (“PBGC”) for special financial assistance (“SFA”) under the American Rescue Plan (“ARP”) Act of 2021 has been ACCEPTED. We are now on our last part of the journey of restoring all benefits reduced by the PBGC mandated cuts which were implemented in 2020 and 2021.
Letter dated April 11, 2022, was forwarded to all Retirees explaining the next phase and indicating to each retiree their:
1. Current Monthly Pension Benefit
2. Reinstated Monthly Pension Benefit
3. Retroactive Payment amount to be paid in a lump sum for past benefits
that were reduced or suspended due to the insolvency cuts March 1, 2020,
and March 1, 2021.
It also stated options for the make-up payment:
1. Direct Rollover
2. 60-Day Rollover
3. No Rollover
UPDATE: On May 2, 2022, the Trustees of Local 641 Pension Fund are proud to announce that the Plan has received the SFA Funding $503,925,447.63. Since receipt of the SFA Funding we can now move forward.
As of June 1, 2022, all retiree’s monthly pension will be restored to their accrued monthly amount. Since the SFA funding was received after the issuance of the May Pension Checks, the Plan will update the Make-up payment estimate to include May, 2022. We are all collaborating with our professionals and software programmers to insure all elections forms, withholding updates are recorded and disbursed properly.
Shortly after June 1st, 2022, we are hopeful the makeup-payments will be disbursed. Our professionals are all committed to ensuring this last phase of SFA Funding of restoring all our members’ hard earned pension benefits as soon as possible.
We want to thank everyone who has already returned the Election Form. If you have NOT returned your Election form, please remember: FUNDS MAY NOT BE RELEASED UNTIL AN ELECTION FORM IS SUBMITTED and must also be notarized to insure member protection.
The Plan is now in the process of following the next phase of the PBGC Interim final rules guidelines These are still considered interim rules and may still change. Teamsters Local 641 Pension Fund as well as many other plans, professionals and participants have written to the PBGC on a few concerns.
One concern pertains to the restrictions placed on the investment of SFA Funds as currently stated in the Interim Final Rule (“IFR”). While the IFR currently limits pension plans on investing SFA funding in only grade bonds, this will in return produce significantly lower returns that would be required to meet the Plan’s continuing obligation to pay benefits and administrative expenses through plan year 2051 as the law was intended.
A Second concern pertains to the benefit restoration for surviving spouses. The way the interim rules are written surviving spouses are only entitled to their own make-up payment not the deceased participant’s portion. Many Plans, professionals and individuals have written to the PBGC as well as their Congressman and Senators to address this issue. We are optimistic that the PBGC will listen to all our concerns and change the rules accordingly.
We of course will keep you updated on any changes to the PBGC Rules when they occur.
Teamsters Local 641 Pension Fund is greatly appreciative for the assistance provided by the PBGC that has permitted Pension Plans such as ours to retroactively fully restore all suspended benefits for all the hardworking Teamsters men and women and their families.
Board of Trustees