Before President Biden signed the American Rescue Plan Act of 2021 (ARPA) into law, financial crisis was looming for many multiemployer plans. More than 130 multiemployer pension plans estimated that they would run out of money within 20 years, and the PBGC itself was projected to become insolvent in 2026.

Although not a permanent solution, ARPA includes important relief for eligible multiemployer pension plans and provides plan sponsors with an opportunity to return to a state of solvency that may not have been possible otherwise.


On March 11, 2021, President Biden signed the $1.9 trillion American Rescue Plan Act of 2021 (ARPA). The law includes stimulus checks, state and local government aid packages, and other measures to support the ongoing economic recovery from the COVID-19 pandemic and related economic crisis. In addition, the stimulus package includes relief for single-employer and multiemployer defined benefit pension plans.

Breaking Down the Relief Available to Multiemployer Plans

ARPA includes the following types of relief for multiemployer-defined benefit pension plans:

  • Funding status. Multiemployer-defined benefit pension plans may retain 2019 plan funding status for 2020 and 2021.
  • Extended rehabilitation periods. Multiemployer defined benefit pension plans currently in endangered, critical, or critical and declining status have the option to extend funding periods for improvement or rehabilitation for 2020 and 2021.
  • Easing of funding standard account rules. Multiemployer-defined benefit pension plans can effectively use pre-COVID funding standard account assessment results.
  • Special financial assistance. ARPA makes available a lump sum cash payment to “severely distressed” multiemployer defined benefit pension plans that are underfunded. The intent is to help plans pay participant benefits through 2051.

In addition, ARPA increased Multiemployer Pension Plan PBGC Premium Rates.

Special Financial Assistance

ARPA gave PBGC the authority to distribute more than $80 billion as grants in the form of special financial assistance (SFA) to troubled multiemployer plans that meet one of the following criteria:

  • In any plan year beginning 2020 through 2022, the plan is in critical and declining status, is less than 40% funded, and has more retirees than active participants
  • The plan has been approved to suspend benefits under the Multiemployer Pension Reform Act of 2014 (MPRA) by March 11, 2021
  • The plan became insolvent after December 14, 2014, but is not fully frozen or terminated

Those Plans in the most critical statuses are eligible to submit applications for special financial assistance now. Application periods for other eligible plans open in April 2022 and will continue through February 2023.

Key Question: How Can Plans Apply for Special Financial Assistance?

In July 2021, the PBGC issued an interim final rule (IFR) for the SFA program. Together with related guidance, the IFR outlines the process eligible MEPPs must follow to apply for SFA.

“Under § 4262.10(d) of PBGC’s SFA regulation, initial applications must be filed no later than December 31, 2025, and revised applications must be filed no later than December 31, 2026. Plans in priority groups will be given the opportunity to file before March 11, 2023.”

Application Periods

Plans can apply for SFA in order of critical status based on the Priority Groups established by the PBGC. The application periods vary by Priority Group as follows:

Priority GroupPlan DescriptionsTarget Date Plans May Apply for SFA*Status
1Already insolvent or projected to become insolvent before 3/11/20227/9/2021OPEN
2Expected to be insolvent within one year of the date the plan’s application is filed12/27/2021OPEN
Implemented MPRA benefit suspensions before 3/11/2021**1/1/2022OPEN
3Greater than 350,000 participants4/1/2022OPEN
4Projected to become insolvent before 3/11/20237/1/2022CLOSED
5Projected to become insolvent before 3/11/20262/11/2023CLOSED
6Present value of financial assistance in excess of $1 billion2/11/2023CLOSED

*PBGC has 120 days to review an application. If capacity to process applications exceeds expectations, then the dates to accept applications may be accelerated.

**MPRA plans can restore benefits under 26 CFR 1.432(e)(9)-1(e)(3) at any time, including before applying for SFA.

As of March 2022, multiemployer plans in Priority Group 1 and Priority Group 2 can submit completed applications for Special Financial Assistance at

Learn More

We recommend that plan sponsors carefully review the unique SFA situation for their particular plan in order to move forward. For help with questions about filing benefits, priority groups, drawbacks, or anything else related to multiemployer benefit plans and ARPA, contact PBMares today.