DOL Indicates Future Guidance for MPRA Plans That Received SFA From PBGC
Published April 26, 2023
As background, the American Rescue Plan Act (ARPA) of 2021, authorized special financial assistance (SFA) through the Pension Benefit Guaranty Corporation (PBGC) to eligible severely underfunded multiemployer plans. The multiemployer plans that cut their retirees’ pension benefits under the Multiemployer Pension Reform Act (MPRA) must reinstate those benefits and make-up payments if the plans are approved for SFA.
The Department of Labor (DOL) Employee Benefits Security Administration (EBSA) has released a statement about the agency's responsibility to ensure, following receipt of SFA, that MPRA and insolvent plans reinstate suspended benefits going forward and pay participants in pay status an amount equal to previously suspended benefit payments.
In the Department of Labor’s view, ARPA’s "inclusion of plans that suspended benefits under MPRA and the prohibition against a future MPRA suspension for a plan receiving SFA reflects a clear legislative objective to allow plan fiduciaries to restore benefits that were previously suspended and to encourage all eligible plans to apply for SFA without raising potential fiduciary liability concerns about undoing current or precluding future MPRA suspensions," the statement reads.
EBSA intends to issue compliance assistance guidance for plans and plan fiduciaries that receive SFA addressing:
- (1) the impact of the SFA rule on the annual funding notice requirements of ERISA section 101(f)
- See FAB 2023-01 issued April 25, 2023.
- (2) summary plan description and summary of material modification disclosures to participants and beneficiaries;
- (3) maintenance of records related to reinstatement of suspended benefits and payment of the make-up payments; and
- (4) the interaction of the ERISA section 203(a)(3)(B) suspension rules with the reinstatement and make-up payment provisions of the SFA rule and related Treasury Department guidance.