This is important information for not only retirees and veteran employees but for new hires, so please read to the end, where there is a special plea for the latter!
We attended the pension trustees meeting this morning and wanted to report the latest on the American Rescue Plan Act’s provision to help save pension funds like ours that are insolvent or soon-to-be insolvent.
As we have previously reported, the Rescue Plan signed by President Joe Biden in March 2021 includes money for multiemployer pension plans projected to run out of money. That total funding is currently set at $94 billion for an estimated 200 troubled pension plans with about 3 million participants.
That money is projected to enable those funds to continue to pay participants full pension payments through 2051. How big a deal is that? The Guild’s plan is currently projected to go insolvent during 2025. So, that is a lot of extra life.
Here’s what will happen next:
Our plan has been deemed eligible for this emergency funding because it currently is in “critical and declining status.”
However, there is a process for when each plan can apply for the funds. The four groups ahead of us are:
1) Plans already insolvent or will be by March 2022.
2) Plans that have cut retiree benefits already to try to extend the life of the plan.
3) Plans in critical and declining status with 350,000 or more participants
4) Plans that will be insolvent before 2023
We are in the next group: Plans that will be insolvent before 2026.
Our plan administrators told us today that means we will apply for our funding in 2023 and expect to receive that payment by Q4 2023. The exact amount our fund will receive depends on very complex concepts still under discussion regarding allowable projections on investment returns, etc.
We will keep you updated with every new piece of information we receive as trustees on the fund.
Now, for all new hires who are not vested in the pension plan, please let this underscore why it is vital you sign up to participate in The Inquirer’s 401(k)!!! It is essential to your future financial stability. If you have any questions about that, feel free to reply to this bulletin and we’ll get in touch with you.
Diane Mastrull, president, NewsGuild of Greater Philadelphia
Bill Ross, executive director, NewsGuild of Greater Philadelphia