Washington, DC – The ERISA Industry Committee (ERIC) is working with the Pension Benefit Guaranty Corporation (PBGC) on its Interim Final Rule on Special Financial Assistance, which sets the requirements for special financial assistance applications and related restrictions and conditions implemented under the American Rescue Plan Act of 2021.
ERIC’s recommendations focused on three areas of concern:
- Removing investment restrictions on special financial assistance
- Providing a more flexible test for requiring documentation and information regarding contributions
- Adopting a reasonableness standard for documentation
“ERIC appreciates the opportunity to help guide the PBGC with its Interim Final Rule as it will impact our member companies who want to continue providing significant pension benefits to union workers,” said Aliya Robinson, Senior Vice President of Retirement and Compensation Policy. “However, ERIC is concerned some of the requirements in the Interim Rule will sabotage the ability of those plans to remain solvent through 2051. Our recommendations are meant to align the Interim Rule with the American Rescue Plan Act of 2021.”
ERIC believes that the restrictions imposed on the investment of the special financial assistance will decrease the effectiveness of the financial assistance and increase the incentive for plans to take on additional risk in investing other assets in an effort to remain solvent through 2051. ERIC also cautions that plans may have difficulty providing the changing contribution assumptions under the Interim Rule and urges the PBGC to allow more flexibility in contribution assumptions for plans. Finally, ERIC argues that the PBGC should adopt a reasonableness standard with respect to documentation since plans have project assumptions over the next thirty years. Without the changes, the final rule will undermine Congress’ mandate to provide sufficient assistance for eligible multiemployer plans to remain solvent through 2051.