PLANSPONSOR - May/June 2024 - 8

RULES & REGULATIONS
The overpayment resulted from the
inclusion of 3,479 deceased participants,
out of roughly 360,000 participants in
total, in Central States' application for
a special financial assistance grant.
relying on an exemption from the DOL.
The exemption allows a QPAM to
facilitate such transactions between the
plan and interested parties. The QPAM
must be financially independent from the
transacting parties.
The new rule maintains the provision
that a QPAM can be disqualified for
10 years if it, an affiliate or " five percent
or more owners " of the QPAM engage in
conduct leading to a criminal conviction.
The rule also adds foreign convictions and
domestic non-prosecution agreements to
the sorts of misconduct that can lead to
a disqualification. The proposal included
foreign non-prosecution agreements, but
that was removed by the final rule.
IBM Wins Dismissal
Of Pension Lawsuit
A federal judge in the U.S. District Court
for the Southern District of New York
granted the motion to dismiss a lawsuit
against IBM, tossing out with prejudice all
four of the counts asserted by the plaintiffs.
The judge threw out the allegations-brought
by three IBM pension
plan participants-ruling that the IBM
Personal Pension Plan " statute of limitations
is enforceable, " he wrote.
The lawsuit had argued that IBM and
the plan administrator committee violated
provisions of the Employee Retirement
Income Security Act by using outdated
mortality assumptions when calculating
joint and survivor benefits for participants.
The case is Joshua Knight et al. v.
International Business Machines et al.
Using outdated assumptions would
continue to " result in a miscalculation of
benefits wherein joint and survivor benefits
are less than the actuarial equivalent
value of a participant's single life annuity
8 PLANSPONSOR.COM May - June 2024
benefit, " plaintiffs argued in an amended
complaint.
Additionally, the lawsuit alleged that
IBM failed to disclose to participants that
they would receive less than the actuarial
equivalent value of their accrued vested
pension benefit if they selected a joint and
survivor annuity.
Central States Returns
SFA Overpayment
The Central States, Southeast and
Southwest Areas Pension Plan reached
a settlement with the Department of
Justice, April 8, and has repaid the federal
government in full for a $126,555,536 overpayment
the pension plan received from
an assistance program. The fund also had
to pay 2.25% in annual interest on that
amount starting from March 26.
The overpayment resulted from the
inclusion of 3,479 deceased participants,
out of roughly 360,000 participants
in total, in Central States' application
for a special financial assistance grant.
In December 2022, Central States was
granted $35.8 billion under the program,
which was created as part of the American
Rescue Plan Act to keep struggling multiemployer
plans solvent through 2051. The
Pension Benefit Guaranty Corporation,
which administers the SFA program,
did not start using the Social Security
Administration's death master file
to
conduct its death audits of SFA applications
until this past November, and the
Central States plan, like all other pension
plans, lacks access to it.
The PBGC said in an emailed statement,
" With respect to other plans that
received SFA before PBGC expanded
the scope of its independent death
audit, PBGC has full census data audits
underway. PBGC is committed to facilitating
the return of SFA amounts made
to those plans based on inaccurate
census data. "
PBGC Rescues Teamster
And UFCW Plans
On April 12, the Pension Benefit Guaranty
Corporation approved two more special
financial assistance grants.
The first was for Teamsters Local
73, a Valley View, Ohio-based pension
plan with 529 workers in the transportation
industry. The plan, which received
$7.5 million from the PBGC, had been
projected to become insolvent in 2038,
when it would have had to issue a 15%
benefit cut to its participants.
According to Local 73's most recent
Form 5500, from the end of 2022, the plan
had 59 active participants, 277 retirees
and 107 who are entitled to benefits in the
future. The plan was 59% funded.
The second grant was for the Mount
Laurel, New Jersey-based United Food
and Commercial Workers Local 152. The
pension plan received $279.3 million.
It was projected to become insolvent in
2029, when it would have had to cut benefits
by 25%. The plan covers 10,252 participants
in the food service industry. A Form
5500 was unavailable for Local 152.
The SFA provision of the American
Rescue Plan Act allows for PBGC funding
for severely underfunded multiemployer
pension plans. Grants are calculated to
ensure plan solvency through 2051. -PS
For in-depth coverage of these topics and more, go to PLANSPONSOR.com/compliance.
http://www.PLANSPONSOR.com/compliance http://www.PLANSPONSOR.COM
PLANSPONSOR - May/June 2024

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