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PBGC Issues Final Rule on SFA for Financially Troubled Multiemployer Pension Plans

Thomson Reuters Tax & Accounting  

· 5 minute read

Thomson Reuters Tax & Accounting  

· 5 minute read

The Pension Benefit Guaranty Corporation (PBGC) has published a final rule that sets forth the requirements for special financial assistance applications and related restrictions and conditions under PBGC’s Special Financial Assistance (SFA) Program for financially troubled multiemployer defined benefit pension plans. (PBGC Reg 4262.1 et seq.)

PBGC final rule

PBGC fact sheet


The SFA Program was enacted as part of the American Rescue Plan Act of 2021 (ARPA). The program provides funding to severely underfunded multiemployer pension plans.

The SFA Program requires plans to demonstrate eligibility for SFA and to calculate the amount of assistance pursuant to ARPA and PBGC regs. SFA and earnings thereon must be segregated from other plan assets, and plans are not obligated to repay SFA to PBGC. Plans receiving SFA are also subject to certain terms, conditions and reporting requirements, including a requirement to provide an annual statement documenting compliance with those terms and conditions. PBGC is authorized to conduct periodic audits of multiemployer plans that receive SFA.

Interim final rule.

On July 9, 2021, PBGC issued an interim final rule setting forth the requirements for special financial assistance applications and related restrictions and conditions pursuant to ARPA (see our article). In response to public comments received, PBGC made various changes to the interim final rule, which it has now released in final form.

Final rule changes.

Significant revisions reflected in the final rule include changes to:

  • the SFA measurement date;
  • the methodology used to calculate SFA;
  • permissible investments of SFA funds;
  • the application of conditions on a plan that merges with a plan that receives SFA; and
  • the withdrawal liability conditions that apply to a plan that receives SFA.

Effective date.

The final rule is effective August 8, 2022. Generally, the provisions of the final rule apply to new applications and are available to plans that previously submitted SFA applications under the interim rule if the plan submits a revised or supplemented application under the final rule.

Plans not approved for SFA under the interim final rule can withdraw and revise their applications under the terms of the final rule. If denied, plans may also revise their application. The final rule describes how plans that filed applications under the interim final rule may supplement or revise their applications.


PBGC has included a 30-day public comment period, solely on the change to the withdrawal liability condition requiring a phased-in recognition of SFA assets for purposes of computing employer withdrawal liability.

For more information, see special financial assistance program for financially troubled multiemployer pension plans.


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