Case Study: Launching a First of Its Kind Retirement Fund
In 2024, Zenith American Solutions partnered with the Board of Trustees of Child Care United (“CCPU”) of California to create a first-of-its-kind Retirement Fund for California's home-based child care providers. This achievement follows successful negotiations by SEIU Local 521, SEIU Local 99 and United Domestic Workers/AFSCME Local 3930, securing $80 million in annual funding through the new Collective Bargaining Agreement (CBA).
The Unions will design and administer the Plan, providing essential financial support to these vital workers.
Final Regulations on Special Financial Assistance for Underfunded Multiemployer Defined Benefit Plans Released
On July 8, 2022, the Pension Benefit Guaranty Corporation (PBGC) finalized new regulations for Special Financial Assistance under the American Rescue Plan Act (ARPA) of 2021, which initially aimed to provide $86 billion for underfunded Multiemployer Defined Benefit Plans.
The updates, effective August 8, 2022, include allowing up to 33% of SFA assets in return-seeking investments, more flexible benefit increase options, and adjustments to the application process and withdrawal liability calculations. Plans can also allocate up to 10% of contribution rates to health benefits with PBGC approval. To date, 28 plans have received $7.4 billion in relief, with the updated program cost estimate ranging between $74 and $91 billion.
Part 2 - American Rescue Plan Act of 2021 Impact on Multiemployer Defined Benefit Plans
The American Rescue Plan Act (ARPA) offers up to $86 billion in relief for underfunded pension plans through 2051. To qualify, plans must meet specific criteria such as being in “critical and declining” status or facing insolvency.
Administered by the PBGC and funded by the Treasury, this program provides a lump sum grant to cover benefits through 2051, including restoring previously cut benefits. Applications are due by December 31, 2025, and the PBGC may prioritize certain plans. For further details, consult your actuary or fund counsel.