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CBO Releases Revised Estimate of Implementation of the PBGC’s Special Financial Assistance Program

The Congressional Budget Office (CBO) released a revised estimate of the final Pensions Benefit Guaranty Corporation’s final rule implementing the Special Financial Assistance (SFA) for multiemployer plans. House Republicans requested this revised CBO score to reflect changes made to the final rule, including those advocated by SWACCA, that resulted in the cost estimate for implementation of the SFA to increase 5% of $4.5 billion.

That’s because the final rule, which was issued in July 2022, changed the method used to compute SFA, including the assumed rate of return. It also changed the type of assets in which pensions plans may invest SFA, which changes the expected rate of return and risk profile of those investments. In its revised estimate, CBO anticipates that the changes in the final rule will increase the total amount of SFA that plans will receive. The CBO estimates that the amount of assistance will total $90.4 billion over the 2022-2032 period, which is $4.5 billion, or 5 percent, more than the $85.9 billion estimated in CBO’s May 2022 baseline budgetary projections, which were based on expectations consistent with the July 2021 interim final rule.

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