The Labor Department's Employee Benefits Security Administration issued guidance Tuesday to address frequently asked questions regarding the annual funding notice requirements for multiemployer plans receiving special financial assistance.
Underfunded multiemployer pension plans are eligible for special financial assistance under the American Rescue Plan Act, which President Joe Biden signed into law in March 2021. The law created the Special Financial Assistance Program, which allows eligible multiemployer plans to apply to the Pension Benefit Guaranty Corp. for SFA. As of April 6, the PBGC has approved about $46.3 billion in SFA to plans encompassing 553,000 participants, the agency said in an April 6 news release.
Plans that receive SFA "must include disclosures regarding the special financial assistance and certain related restrictions, limitations and conditions in the plan's annual funding notice," which is required by the Employee Retirement Income Security Act, according to a news release Tuesday from the Labor Department.
The guidance addresses 11 frequently asked questions, though the department recognizes that it "does not address all SFA-related issues that may arise with respect to annual funding notices," the bulletin states.
Pending further guidance, the department will treat compliance with the Tuesday guidance "as constituting a reasonable, good faith interpretation" of the disclosure requirements for annual funding notices.
Multiemployer plans that have already prepared their annual funding notices for 2022 are expected to evaluate whether their notice is consistent with the guidance, and if needed, "take appropriate corrective action," according to the bulletin.
