PBGC Issues Regulations on Special Assistance for Troubled Multiemployer Plans

The Pension Benefit Guaranty Corporation (PBGC) has issued interim final regulations, found at SFA regulation, that provide details on how the special financial assistance program provided by the American Rescue Plan Act of 2021 will be administered and the timetable for when plans can apply. This alert explains why many plan sponsors may want to submit comments.

Cheiron Initial Observations: The PBGC regulations interpret the law in a way that practically ensures that plans receiving the special financial assistance (SFA) will be insolvent by 2052. Additionally, the regulations require a burdensome amount of information to be submitted with any application and impose restrictive conditions upon plans that receive the SFA. The time period for requesting SFA is structured so that plans that suspended benefits under the Multiemployer Pension Reform Act of 2014 (MPRA) will likely not receive any money until almost a year after enactment of the law while currently insolvent plans can apply today (and pay back the PBGC for the assistance received during insolvency). Finally, the regulations may well result in plans that suspended benefits under MPRA deciding they are better off not requesting the SFA.

Comments:  Comments are due by August 11, 2021.  Comments may be submitted by any of the following methods:

  • Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments.
  • Email: comments@pbgc.gov.
  • Mail or Hand Delivery: Regulatory Affairs Division, Office of the General Counsel, Pension Benefit Guaranty Corporation, 1200 K Street NW, Washington, DC 20005–4026.

The PBGC strongly encourages that public comments be submitted electronically.


The American Rescue Plan Act of 2021 (the Act) provided for financial relief for troubled multiemployer pension plans. The financial relief is to be provided by the PBGC under new provisions that were added to title IV of the Employee Retirement Income Security Act of 1974 (ERISA). The relevant provisions of the relief were described in our Cheiron Pension Regulatory Alert of March 11, 2021, which can be found at Cheiron - Troubled Multiemployer Plans Get Relief. As we observed in our March 11 alert, a key issue under the law was exactly how the amount of assistance is to be determined.

PBGC Interim Final Regulations

The PBGC regulations provide the awaited details on how the SFA program will be implemented and the time table for eligible plans to apply for relief. Together with additional information found on the PBGC’s website at https://www.pbgc.gov/arp-sfa, the regulations describe how to apply for the financial assistance, the information needed, and when applications can be made. The regulations also set forth conditions that will apply to a plan that receives the special financial assistance.

The regulations interpret the key issue of how the amount of the special financial assistance is to be determined as the amount by which the value of the plan’s obligations (benefits plus administrative expenses) exceeds the value of the plan’s resources. The value of the plan’s resources is defined as the sum of (1) the fair market value of plan assets and (2) the present value of all future contributions, withdrawal liability payments, and other payments expected to be made to the plan (excluding financial assistance from the PBGC). For purposes of these calculations, the present values are determined through the end of the plan year ending in 2051.

Cheiron Observations:  The amount of special financial assistance allowed by the PBGC regulations minimizes the amount of assistance that a plan can receive and practically ensures that the plan will be insolvent by 2052. This is because, in part, contributions meant to be used for benefits payable after 2051 will be used to offset the SFA amount.

 Plans with an existing MPRA benefit suspension and/or partition should consult their actuary and counsel to think carefully about whether to apply for special financial assistance. Plans that apply for the SFA will be able to restore benefit cuts, but then must drop the benefits to the PBGC guarantee level upon later insolvency. Plans that maintain their MPRA suspension may be able to pay the reduced level of benefits indefinitely.

The regulations set out seven priority groups to order the timing of applications. The seven priority groups and the application timetable are as follows:


Priority Group

PBGC’s Description of Group

Date Plans May Apply


Plans already insolvent or projected to become insolvent before March 11, 2022.

Beginning on July 9, 2021.


Plans that implemented a benefit suspension under section 305(e)(9) of ERISA as of March 11, 2021.

Plans expected to be insolvent within 1 year of the date an application for SFA is filed.

Beginning on January 1, 2022, or earlier date specified on PBGC’s website.


Plans in critical and declining status that had 350,000 or more participants.

Beginning on April 1, 2022, or earlier date specified on PBGC’s website.


Plans projected to become insolvent before March 11, 2023.

Beginning on July 1, 2022, or earlier date specified on PBGC’s website.


Plans projected to become insolvent before March 11, 2026.

Date to be specified on PBGC’s website at least 21 days in advance of such date, but no later than February 11, 2023.


Plans for which PBGC computes the present value of financial assistance under section 4261 of ERISA to be in excess of $1 billion (in the absence of SFA).

Date to be specified on PBGC’s website at least 21 days in advance of such date, but no later than February 11, 2023.


Additional plans that may be added by PBGC based on other circumstances similar to those described for priority groups 1–6.

Date to be specified on PBGC’s website no later than March 11, 2023.


Cheiron Observations: A plan that suspended benefits under MRPA will not be able to apply for SFA until 2022 absent the PBGC opening the filing earlier than January 1, 2022, as stated in the chart. Given 120 days to process the request, a plan may not receive any money to restore the suspended benefits until more than one year after the enactment of the law. Also, a plan that does not fall into one of the priority groups listed above (for example, because the plan is critical and declining but not projected to run out of money until after 2026), will have to wait until at least 2023 to file for SFA. Of course, given the interpretation of the amount of assistance and the accompanying restrictions, such a plan may decide it is better to apply for a suspension of benefits under MPRA instead. 

Cheiron consultants can assist you in understanding the regulation and preparing any comments.

Cheiron is an actuarial consulting firm that provides actuarial and consulting advice. However, we are neither attorneys nor accountants. Accordingly, we do not provide legal services or tax advice.