SFA Funding- FAQs
Where Did The Special Financial Assistance (SFA) Funding Come From?
The funding came from a provision in the American Rescue Plan Act which set aside $94 billion to provide relief to more than 200 multiemployer pension plans so that they could remain solvent and provided benefits to participants until the year 2051. The Special Financial Assistance Program is administered by the federal government through the Pension Benefit Guarantee Company (PBGC).
Why Did The Automotive Industries Pension Plan Apply For SFA Funding?
The Pension Plan has been in a “critical and declining status” for the past decade. If the Plan did not receive the SFA funding, the Plan would have gone insolvent by 2032. This means that the Plan would have needed financial assistance from the PBGC and reduced pension benefits to the guaranteed level by 2032.
How Much Money Did The Automotive Industries Pension Plan Receive?
The Pension Plan was approved for $1,056,058,113 in SFA funding. The Plan was also approved to receive interest in the amount of $23,871,684.05. Total amount received by the Pension Plan in SFA funding is $1,079,929,797.05.
How Long Will The SFA Funding Last?
As required by the PBGC, the SFA money will be used to pay for participant benefits and plan expenses. It is estimated that the SFA funds will be used for the next 7-8 years. During this time the plan’s “legacy” assets will continue to be invested. The “legacy” assets will be used to pay benefits and plan expenses once the SFA money has been exhausted.
The SFA Funds Were Given To The Plan To Extend The Plan To 2051. What Happens In 2051?
The purpose of the SFA program is to assure that participant benefit payments and plan expenses would be covered through the year 2051 and the amount of funding the Plan received reflects this purpose. However, there is the possibility that the Plan could extend solvency past 2051 depending on investment returns.
Are There Limitations To What The Pension Plan Can Do With The SFA Funding?
Yes. The SFA funds, and any investment earnings from the SFA funds, can only be used to pay benefits and expenses. It cannot be used for any other purpose.
The Trustees Made Changes To The Pension Plan Under A Rehabilitation Plan That Reduced Accruals And Eliminated Some Benefit Options. Can These Now Be Restored Because The Plan Has Received SFA Funding?
No. The Pension Plan is prohibited from making any such increases or improvements under the rules of the SFA program.
I Am Currently Retired. Will The SFA Funding Impact Or Change My Monthly Benefits Payments?
No. You will have no change in your benefit payments and continue to receive the same benefit payments.
I Am No Longer Working In The Industry But I Have A Vested Benefit With The Pension Plan. Will The SFA Funding Impact Or Change My Accrued Benefit When I Am Eligible For Retirement?
No. The accrued benefit you earned while working will remain the same.
Where Can I Find More Information On The SFA Funding Received By The Pension Plan?
Information can be found on the PBGC website at www.pbgc.gov