The Pension Benefit Guaranty Corporation (PBGC) announced a final rule earlier this week that implements changes to the Special Financial Assistance (SFA) Program for financially troubled multiemployer pension plans. The changes are responsive to public comments received on PBGC’s interim final rule and will better protect the pensions earned by workers and retirees covered by multiemployer plans eligible for assistance. The final rule makes various changes that address the public comments received: • Allows plans to invest up to 33% of their SFA funds in return-seeking investments (e.g., publicly-traded common stock and equity funds that invest primarily in public shares); with the remaining 67% restricted to high-quality fixed income investments. • Modifies the SFA calculation method to use separate interest rates for plans’ SFA and non-SFA assets; and aligns the interest rates used to calculate SFA with reasonable expectations of investment returns on plans’ SFA assets. • Provides a different methodology for the calculation of SFA for plans that implemented benefit suspensions under the Multiemployer Pension Reform Act of 2014 (MPRA). Taken together, these changes enhance plans’ ability to project that they will be able to pay benefits through 2051. The final rule also makes changes to several conditions applicable to plans that receive SFA: • Helps ensure that SFA funds do not subsidize employer withdrawals by requiring plans to phase-in recognition of SFA funds for purposes of computing employer withdrawal liability. • Clarifies the conditions applicable to a plan that merges with a plan that receives SFA. • Makes changes to the restrictions on plan benefit increases and reallocation of contributions to other plans. Click here to read more from the PBGC.