The Pension Benefit Guaranty Corporation (PBGC) released an interim final rule on July 9, 2021 which offered guidance on the Special Financial Assistance (SFA) Program as established under the American Rescue Plan Act (ARPA).

To ensure that it is not overwhelmed with applications and to prioritize the most affected multiemployer pension plan participants, the PBGC has established Priority Groups for plans intending to submit applications for SFA.

The application window start date and criteria to be met for each Priority Group are as follows:

• Priority Group 1: The PBGC began taking applications for the Special Financial Assistance Program on July 9, 2021 for Priority Group 1.  Priority Group 1 consists of plans that are already insolvent or are projected to become insolvent prior to March 11, 2022.
• Priority Group 2: The PBGC will begin taking applications for Priority Group 2 on January 1, 2022*.  Priority Group 2 consists of plans that implemented benefit suspensions before March 11, 2021 under the Multiemployer Pension Reform Act of 2014 (MPRA).  Note that plans will still fall under Priority Group 2 even if they restore previously suspended benefits before applying for SFA.  Additionally, plans that are expected to become insolvent within one year of the application for Special Financial Assistance are included in Priority Group 2.  
• Priority Group 3: The PBGC will begin accepting applications for Priority Group 3 on April 1, 2022*.  Priority Group 3 consists of plans that are in critical and declining status with more than 350,000 participants.
• Priority Group 4: The PBGC will begin accepting applications for Priority Group 4 on July 1, 2022*.  Priority Group 4 consists of plans that are projected to become insolvent before March 11, 2023.
• Priority Group 5: The PBGC will specify on its website at least 21 days in advance of when it will begin accepting applications for Priority Group 5, and it must begin accepting applications no later than February 11, 2023.  Priority Group 5 consists of plans projected to become insolvent before March 11, 2026.
• Priority Group 6: The PBGC will specify on its website at least 21 days in advance of when it will begin accepting applications for Priority Group 6, and it must begin accepting applications no later than February 11, 2023.  Priority Group 6 is for plans whose present value of financial assistance exceeds $1 billion.

*All application dates are target dates only and are subject to change.  An earlier date may be specified on the PBGC’s website in the future.

No later than March 11, 2023, the application window will be open to all other eligible plans.

The PBGC may add more Priority Groups if there are additional circumstances that differ from the established Priority Groups.  In addition to the established Priority Groups, the PBGC will also begin accepting Emergency Filings at the same time as Priority Group 2 applications. To qualify for an Emergency Filing, the plan must notify the PBGC prior to submitting the application, verify the claim of emergency status, and meet one of two criteria:

• Be insolvent or expected to be insolvent within one year of the application date; or
• Suspend benefits prior to March 11, 2021.

As Priority Group application windows open, the PBGC will continue to accept applications for earlier Priority Groups.  The PBGC will accept as many applications as it anticipates it can process in 120 days.  Once this limit is met, the application window will temporarily close until the PBGC has capacity.

Plans intending to apply for SFA can visit https://www.pbgc.gov/arp-sfa to check eligibility status and to start an online application (if eligible).