July 9, 2021

Updated July 11, 2022

Updated January 3, 2023 

Updated July 27, 2023

Updated November 1, 2023 

PBGC SFA 22-07 

Special Financial Assistance Assumptions

Table of Contents 

I. IntroducƟon and background ...........................................................................................................................3

II. Changes to the AssumpƟons Guidance ................................................................................................................5

III. Acceptable assumpƟon changes ......................................................................................................................6

A. AdopƟon of assumpƟons not previously factored into pre-2021 cerƟficaƟon of plan status ...................6

1. CBU assumpƟon ...........................................................................................................................6

2. AdministraƟve expense assumpƟon ............................................................................................6

B. Proposed change to mortality assumpƟon .........................................................................................................8

C. Proposed change to mortality improvement projecƟon scale ..................................................................8

D. Proposed change to new entrant profile assumpƟon ...............................................................................9

E. Proposed change to contribuƟon rate assumpƟon............................................................................................9

F. Proposed change for “missing” terminated vested parƟcipants ...............................................................9

IV. Generally acceptable assumpƟon changes .....................................................................................................11

A. Proposed change to CBU assumpƟon ......................................................................................................11

1. AssumpƟon for first 10 years of projecƟon period ....................................................................11

2. AssumpƟon for years more than 10 years in the future ............................................................12

3. Exclusion period .........................................................................................................................12

4. Examples ....................................................................................................................................12

B. Proposed change to mortality assumpƟon .............................................................................................15

C. Proposed change to assumpƟons (other than the SFA interest rate and non-SFA interest rate) to reflect

significant plan experience between the parƟcipant census date and the SFA applicaƟon date.............15

D. Actuarial assumpƟons used in approved applicaƟons under the MulƟemployer Pension Reform Act of

2014 (MPRA).............................................................................................................................................16

V. Generally not acceptable assumpƟon changes ..............................................................................................17

A. Proposed change to CBU assumpƟon .....................................................................................................17

B. Proposed change to investment expense assumpƟon ............................................................................17

C. Proposed change to assumpƟons (other than the interest rates) based on short-term plan

experience between the parƟcipant census date and the SFA applicaƟon date ....................................17
 

VI. AddiƟonal informaƟon ..................................................................................................................................19

A. Actuarial assumpƟons for certain plans ................................................................................................. 19

B. Actuarial assumpƟons for withdrawal liability payments ...................................................................... 19

C. AssumpƟon changes regarding “missing” terminated vested parƟcipants ............................................ 20

D. Hard-to-Value assets for SFA applicaƟons ...............................................................................................20

E. Nonbinding guidance ..............................................................................................................................21

F. Department of Labor advisory ................................................................................................................21

G. Contact informaƟon ................................................................................................................................21

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I. Introduction and background

This guidance provides guidelines for changes to certain assumptions that plans may use for

purposes of determining the amount of special financial assistance (SFA). Plans may, but are not

required to, use the guidelines if they are reasonable for the plan.

This guidance is divided into four sections:

o Acceptable assumption changes,

o Generally acceptable assumption changes,

o Generally not acceptable assumption changes, and

o Additional information

Section 9704 of the American Rescue Plan (ARP) Act of 2021 (P.L. 117-2) added section 4262 to the

Employee Retirement Income Security Act of 1974 (ERISA), which authorizes PBGC to provide

special financial assistance (SFA) to eligible multiemployer plans. Certain multiemployer plans are

eligible to apply for SFA if they are in critical and declining or critical status; were approved to

suspend benefits under the Multiemployer Pension Reform Act of 2014 as of March 11, 2021; or

became insolvent after December 16, 2014, and have not terminated as of March 11, 2021.

On July 8, 2022, PBGC published a rule that, once effective on August 8, 2022, finalized PBGC’s

SFA regulation and replaced an interim final rule issued on July 9, 2021. The final rule made some

changes to the SFA regulation from the interim final rule.

The SFA regulation provides regulatory guidance to multiemployer plans on the requirements for

SFA applications and related restrictions and conditions. This document, providing guidance on

certain SFA assumptions, along with the SFA instructions for filing requirements and corresponding

templates, provide additional guidance to multiemployer plan practitioners on how to prepare and

file the required application information for SFA.

Section 4262(e) of ERISA generally looks to plan assumptions previously selected by the plan

actuary (original assumptions) for calculating the amount of SFA. Section 4262(e)(4) provides a

mechanism for a plan to propose changes to actuarial assumptions if it determines that the use of

one or more of its original assumptions (other than the interest rate) is unreasonable.

Under § 4262.5(c) of PBGC’s SFA regulation, a plan that proposes to change its original

assumptions is required to describe in its application why any original assumption is no longer

reasonable, assert that the plan proposes to use a changed assumption, and demonstrate in its

application why the changed assumption is reasonable.

PBGC will consider the plan’s changed assumption to be reasonable unless PBGC determines that

the assumption is unreasonable or determines that a plan’s changed assumptions are unreasonable

in the aggregate. This guidance explains, for certain changed assumptions, when PBGC might (or

might not) consider an assumption reasonable.

When a plan adopts an assumption that is needed to project cash flows beyond the period reflected

in the most recent certification of plan status before January 1, 2021 (pre-2021 certification of plan

status), PBGC considers this “extension” of an assumption to be an assumption change. Examples

of assumptions that should have extensions are contribution base units (CBUs), administrative

expenses, projection of the number of active participants, contribution rates, withdrawal liability

payments for currently withdrawn employers, and withdrawal liability payments for future

withdrawals.

To the extent a plan adopts such an extension of an assumption or proposes another change to an

assumption in accordance with § 4262.5(c) of PBGC’s SFA regulation, PBGC will accept the

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assumption changes provided the plan includes the information required by § 4262.5(c) in the

application and the plan’s demonstration shows the assumption is reasonable. If the changed

assumption meets one of the criteria described in section III. A. – F. of this guidance regarding

acceptable assumption changes, it is sufficient to include a statement to that effect in order to meet

the requirements of § 4262.5(c)(1)(iii) instead of providing a detailed demonstration.

The amount of SFA requested is determined as of the plan’s “SFA measurement date.” Within

this document, except for a plan that filed its initial SFA application before August 8, 2022, when

the interim final rule was in effect, a plan’s SFA measurement date is defined in § 4262.2 of

PBGC’s SFA regulation as “the last day of the third calendar month immediately preceding the

date the plan’s initial application...was filed.” For example, if the plan’s initial application was

filed on March 15, 2023, its SFA measurement date would be December 31, 2022; if the plan’s

initial application was filed on July 1, 2023, its SFA measurement date would be April 30, 2023.

For a plan that submitted its initial SFA application under the interim final rule before August 8,

2022, its SFA measurement date is the last day of the calendar quarter immediately preceding

the date the plan’s initial application was filed.

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II. Changes to the Assumptions Guidance

This document is an update to Special Financial Assistance Assumptions PBGC SFA 22-07

published on July 11, 2022, and updated on January 3, 2023. Below is a summary of the substantive

changes made to this guidance since January 3, 2023. In addition to those changes listed in

specific sections, this document has been modified to remove references to eligibility for SFA. This

document is intended to only provide nonbinding guidance with respect to assumptions utilized for

the determination of the SFA amount:

Section Changes Made

VI.A. Added footnote (new FN #1) to “1. Assumption for first 10 years of

projection period” In the case of applications reflecting experience during or

after the COVID period, the number of plan years reflected in the development

of the assumption may be non-consecutive. See Example #3 in this section.

Changed Example #3 to exclude comparison of 2019 CBUs to 2022 CBUs in

development of the geometric average, as this could result in an unreasonable

assumption given the 3-year experience period (2019-2022), which may include

CBU influences other than COVID-19.

Revised Example #4 to clarify PBGC’s analysis of experience between the SFA

measurement date and application filing date (or revised application filing date).

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III. Acceptable assumption changes

If any changed assumption meets one of the criteria described in A – F of this section, the

requirements of § 4262.5(c)(1)(iii) to demonstrate that the changed assumption is reasonable are

not necessary; it is sufficient to include a statement to that effect instead of a detailed

demonstration.

In accordance with the SFA instructions for filing requirements and corresponding templates, a plan

is required to reflect any of the changed assumptions described in parts A. – E. but not F. of this

section in the “Baseline” details. The changed assumptions described in this section are not required

to be disclosed in the “Reconciliation” details. (For a description of Baseline and Reconciliation, see

the SFA instructions posted on PBGC’s website at www.pbgc.gov.)

A. Adoption of assumptions not previously factored into pre-2021 certification of plan

status

A plan’s certification of plan status generally does not utilize assumptions for projected CBUs or

plan-related administrative expenses more than 20 years in the future. In addition, before the

enactment of ARP, if a plan was projected to become insolvent in less than 20 years, the plan

generally did not utilize assumptions for projected CBUs or plan-related administrative expenses

for years after the projected insolvency date.

As such, as part of their SFA application, most plans will need to adopt a change in assumption

for the later years in the SFA projection period not factored into the pre-2021 certification of plan

status (the “post-certification projection years”).

PBGC will accept the following assumptions for post-certification projection years.

1. CBU assumption

Unless PBGC determines that the CBU assumption used for the plan years projected in the

pre-2021 certification of plan status is unreasonable, PBGC will accept a change in the CBU

assumption for the post-certification projection years if the number of assumed CBUs for

such years is the same or no less than the number assumed for the last full plan year for

which a CBU assumption was utilized in the pre-2021 certification.

Example #1. If the pre-2021 certification of plan status projected the plan to go insolvent

during the plan year beginning January 1, 2026, the last full plan year in which a CBU

assumption was utilized is the plan year beginning January 1, 2025. The assumed CBUs for

the 2025 plan year were 10,000. Unless PBGC determines that the CBU assumption used

for plan years through 2025 is unreasonable, PBGC will accept an extension of the CBU

assumption that assumes 10,000 CBUs in 2026 and future years.

Example #2. The pre-2021 certification of plan status projected a decrease of 2% per year in

CBUs over the 20 years covered by the projection resulting in 1,000 CBUs for year 20.

Unless PBGC determines that the CBU assumption that uses the same number of CBUs for

each projection year as were assumed in the pre-2021 certification of plan status is

unreasonable, PBGC will accept an extension of the CBU assumption that assumes 1,000

CBUs for years 21 – 30.

2. Administrative expense assumption

If PBGC determines that the administrative expense assumption used for the plan years in

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the pre-2021 certification of plan status (using the methodology from that certification) is

reasonable, then PBGC will accept a change in an administrative expense assumption for

the post-certification projection years if the rate of increase for administrative expenses for

such years is the same or no more than the increase assumed for the last full plan year in

the projection period used in the pre-2021 certification of plan status for which there was an

assumption utilized, further adjusted to reflect the PBGC premium increase under section

4006(a)(3)(A) of ERISA that goes into effect in 2031, subject to a cap determined as a

specified percentage (taken from the table below) of projected benefit payments for the

same year to which administrative expenses are being projected.

Annual Benefit Payments for the Last

Plan Year Ending On or Before the

SFA Measurement Date

Cap on Projected Administrative Expenses

as a Percentage of

Projected Annual Benefit Payments

$100 million or more 6%

$50 million but less than $100

million

9%

$5 million but less than $50 million 12%

Less than $5 million 15%

While PBGC will not question the reasonableness of this acceptable extension of the

administrative expense assumption, the application should include sufficient supporting

information for PBGC to confirm that the assumed administrative expenses in the postcertification projection years have been calculated in a manner consistent with the above

methodology.

Example #1. In a plan’s pre-2021 certification of plan status, the plan was projected to

become insolvent in the plan year beginning January 1, 2027. For the pre-2021 certification

of plan status, administrative expenses were estimated as equal to the prior year’s actual

amount and assumed to increase by 2.0% per year through 2024, and to increase by 1.5%

per year in 2025 and 2026. There was no assumption utilized for administrative expenses for

years after 2027, and the last full plan year in the projections was 2026. Benefit payments for

the last plan year ending on or before the SFA measurement date are $75 million. For this

plan, if PBGC determines that the administrative expense assumption used for plan years

through 2026 (using the methodology from the pre-2021 certification of plan status) is

reasonable, then PBGC will accept an extension of the administrative expense assumption

under which assumed administrative expenses in the post-certification years are calculated

as follows:

o Calculate the assumed administrative expenses for each year, without application of the

cap, as follows:

− For years before 2027, assumed administrative expenses are determined in the

same manner as in the pre-2021 certification of plan status. If the plan applies for

SFA in 2022, the 2022 assumed administrative expenses are calculated as the actual

2021 amount increased by 2.0%. For 2023 through 2024, the assumed administrative

expenses are 2.0% higher than the prior year’s assumed administrative expenses.

The 2025 assumed administrative expenses are 1.5% higher than the 2024 assumed

administrative expenses, and 2026 assumed administrative expenses are 1.5%

higher than the 2025 assumed administrative expenses.

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− For 2027 through 2030, 1.5% higher than the prior year’s assumed administrative

expenses,

− For 2031, 1.5% higher than the 2030 assumed administrative expenses plus the

amount needed to reflect the premium increase, and

− For years after 2031, 1.5% higher than the prior year’s assumed administrative

expenses.

o Apply the cap to the applicable post-certification projection years:

− For all years after 2026, the projected administrative expenses determined above

for each year are limited to 9% of the projected benefit payments for such year. The

cap is 9% because the annual benefit payments for the last plan year ending on or

before the SFA measurement date are between $50 and $100 million.

Example #2. A plan has annual benefit payments more than $100 million. The pre-2021

certification of plan status for the plan projected a 2.5% increase in administrative expenses

each year. For 2040, the last full plan year of the projection in the pre-2021 certification of

plan status, administrative expenses were equal to 7% of annual benefit payments. If PBGC

determines that the administrative expense assumption used for plan years through 2040

(using the methodology from the pre-2021 certification of plan status) is reasonable (even

though the amounts exceed the 6% of benefit payments threshold), PBGC will accept the

extension of the administrative expense assumption for 2041 through 2051 (the postcertification projection years) with the 6% cap from the above table applied.

B. Proposed change to mortality assumption

PBGC will accept a change to the plan’s healthy life mortality assumption if the plan adopts the

Pri-2012 amount-weighted, employee and non-disabled annuitant Blue Collar tables

(Pri2012(BC)) with a projection scale most recently published by the Retirement Plans

Experience Committee (RPEC) of the Society of Actuaries or any projection scale published by

the RPEC in the calendar year of the SFA measurement date (or any subsequent calendar year)

or in the two calendar years preceding the SFA measurement date.

PBGC will also accept a change to the plan’s disabled life mortality assumption if the plan adopts

the Pri-2012 amount-weighted Disabled Retiree table with a projection scale most recently

published by the RPEC or any projection scale published by the RPEC in the calendar year of

the SFA measurement date (or any subsequent calendar year) or in the two calendar years

preceding the SFA measurement date.

C. Proposed change to mortality improvement projection scale

PBGC will accept adoption of any mortality improvement projection scale most recently

published by the RPEC or any projection scale published by the RPEC in the calendar year of

the SFA measurement date (or any subsequent calendar year) or in the two calendar years

preceding the SFA measurement date.

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D. Proposed change to new entrant profile assumption

PBGC will accept a change to the plan’s new entrant profile assumption if the distributions of

age, service, and gender are based on the characteristics of the new entrants and rehires to the

plan in the five plan years preceding the plan’s SFA measurement date (reflecting all new

entrants and rehires in those five plan years rather than only those remaining in service), and the

age bands used in the new entrant profile are no greater than 10 years.

While PBGC will not question the reasonableness of this acceptable assumption, the application

should include sufficient supporting information for PBGC to confirm that the assumed new

entrant profile is based on the methodology described above. Specifically, the application should

identify the new entrant profile assumption and should include the experience analysis

separately for each of the last five plan years.

E. Proposed change to contribution rate assumption

PBGC will accept a change to the plan’s contribution rate assumption if the assumption reflects

anticipated actual employer contribution rates for the current and succeeding plan years

consistent with the terms of one or more collective bargaining agreements or contribution

allocation arrangements agreed to prior to July 9, 2021, but a plan cannot reflect a substantial

contribution rate decrease negotiated after March 11, 2021, unless the plan provides the

demonstration noted in § 4262.4(f)(4).

Note that contribution rate increases agreed to on or after July 9, 2021, must be disregarded even

if they are agreed to before the SFA measurement date.

Example #1. The SFA measurement date for a plan is March 31, 2022. The collective bargaining

agreement (CBA) for contributing employer A was entered into before July 9, 2021, and expires

on March 31, 2024. The contribution rate under the CBA for employer A is $5.00 per base unit in

2022, $5.25 in 2023, and $5.50 in 2024. PBGC will accept $5.00 for 2022, $5.25 for 2023, and

$5.50 for 2024 and subsequent years.

Example #2. The SFA measurement date for a plan is March 31, 2022. The collective bargaining

agreement (CBA) for contributing employer B was entered into on or after July 9, 2021, and

expires on December 31, 2025. The contribution rate under this new CBA for employer B is $6.00

per base unit in 2023, $6.25 in 2024, and $6.50 in 2025. The contribution rate under the prior CBA

for employer B is $5.00 per base unit in 2020, $5.25 in 2021, and $5.50 in 2022. PBGC will accept

$5.50 for 2022 and subsequent years.

F. Proposed change for “missing” terminated vested participants

Some multiemployer plans utilize an actuarial assumption to exclude the benefits and liabilities

for certain older terminated vested participants who have not yet applied for benefits from the

measurement of plan liabilities and benefit payment projections in their actuarial valuations and

certifications of plan status. For example, some plans take the position that if a terminated

vested participant has not applied for benefits by the time the participant reaches age 70, the

liabilities for benefits for that participant should be excluded from the measurement of plan

liabilities under the assumption that the participant will never apply for benefits.

If a plan that excluded all or a portion of benefits for certain terminated vested participants in its

pre-2021 certification of plan status proposes a change in assumptions that has the effect of

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including benefits for some or all of the previously excluded participants, PBGC will accept such

a change provided that benefits for participants previously excluded who are older than age 85

on the SFA measurement date are excluded for purposes of determining the amount of SFA.

While PBGC will not question the reasonableness of this acceptable assumption change, the

application should include (as part of the supporting rationale and information for the assumption

change) the following information:

o A listing (including relevant data items such as current age or date of birth, gender,

assumed payment age or date, benefit amount at normal retirement date, benefit amount

at assumed payment age or date, lump sum retroactive benefit payment as of SFA

measurement date if applicable) of the participants whose benefits were excluded from

the measurement of liabilities in the most recent actuarial valuation that would be

included in the determination of the amount of SFA,

o A description of the plan’s policies and procedures for locating missing participants as

well as the specific efforts that the plan has made to locate such participants, and

o Details of a recent death audit (performed not earlier than one year prior to the SFA

measurement date) demonstrating that there is no readily available information indicating

that any such participants are deceased as of the SFA measurement date. Remove any

"'missing' terminated vested participants" that are known to be deceased after the census

data date and before the SFA measurement date. This requirement is only for this

assumption which is in contrast to Section B(9) of the General Instructions for

Multiemployer Plans Applying for Special Financial Assistance.

Unlike the approach for other acceptable assumption changes, the instructions for filing an SFA

application specifically require that the Baseline details (Template 5A) should not reflect this

assumption change, and instead this assumption change should be separately identified and

quantified in the Reconciliation details (Template 6A).

Also see section VI.C. for additional guidance with respect to assumption changes regarding

“missing” terminated vested participants.

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IV. Generally acceptable assumption changes

To the extent a plan proposes to change an assumption in accordance with § 4262.5(c) of PBGC’s

SFA regulation, PBGC will generally accept the assumption changes described in this section IV

provided the plan includes the information required by § 4262.5(c) (including information for

assumption changes described in the SFA filing instructions) in the application and the plan’s

demonstration shows the assumption is reasonable.

While PBGC expects that an assumption following these guidelines generally will be acceptable and

will require less explanation than an assumption that does not follow these guidelines, PBGC may

not accept the proposed changed assumption if significant facts and circumstances exist that render

the otherwise generally acceptable assumption change to be unreasonable. While the applicant

would not be able to rely on these guidelines under these circumstances, the applicant may still be

able to justify the change by supplying additional data or information demonstrating that the change

is reasonable. Please see the General Instructions for Multiemployer Plans Applying for Special

Financial Assistance, Section D(6)(b) for examples of supporting rationale and information for

different types of assumption changes.

In accordance with the SFA instructions for filing requirements and corresponding templates, a plan

is required to include any of the changed assumptions described in this section in the

“Reconciliation” details. The changed assumptions described in this section should not be included

in the “Baseline” details.

A. Proposed change to CBU assumption

The guidance in section IV.A. for a proposed change to the CBU assumption applies to the

aggregate total CBU assumption for the plan.

1. Assumption for first 10 years of projection period

In general, PBGC will look to the geometric average rate of change in actual CBUs over the

most recent 10 plan years preceding the SFA measurement date (excluding any plan year that

contains any part of the “COVID period” defined in section IV.A.3. below) as the basis for its

review.1 If that average is:

o Greater than or equal to zero (i.e., on average, CBUs have been increasing or remaining

level), PBGC generally will accept a plan’s changed CBU assumption for the first 10 plan

years (the “10-Year Projection Period”) if assumed future CBUs for those 10 plan years

are no less than actual CBUs for the most recent plan year ending before the SFA

measurement date that does not include the COVID period.

o Less than zero (i.e., on average, CBUs have been decreasing), PBGC generally will

accept a plan’s changed CBU assumption for the first 10 plan years if CBUs for those 10

plan years are assumed to decline each year at that average rate, not to exceed a 3.0%

per year rate of decline.

1 In the case of applications reflecting experience during or after the COVID period, the number of plan years

reflected in the development of the assumption may be non-consecutive. For example, Example #3 in this

section shows how to account for 2020 and 2021 CBU data for purposes of calculating nine ratios (year-toyear changes) needed to determine the 10-year average decline.

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For this purpose, the initial CBU amount used to project CBUs is the actual amount of CBUs

for the most recent plan year ending before the SFA measurement date that does not include

the COVID period.

10-Year Projection Period: The assumption specified above applies to plan years through the

10th year subsequent to the most recent plan year ending before the SFA measurement date

that does not include the COVID period.

2. Assumption for years more than 10 years in the future

PBGC generally will accept a change to the plan’s CBU assumption for the period after the

10-Year Projection Period in section IV.A.1. above, if for each such plan year, the projected

CBUs increase by no more than 1.0% per year, remain constant, or decline by no more than

1.0% per year.

3. Exclusion period

For purposes of this guidance, the term “COVID period” means the period beginning on

March 1, 2020 and ending on December 31, 2021.

Data from the COVID period is excluded to take into account the period during which a plan’s

industry may have been affected by the COVID-19 pandemic and to avoid using data that

could skew the CBU assumption in either direction. The exclusion period begins March 1,

2020, the beginning of the presidentially declared national emergency2 and ends December

31, 2021, which is a proxy for when many industries began to stabilize.

Providing a set exclusion period is intended to simplify the information needed to support the

changed CBU assumption. As explained above, plans may, but are not required to, use the

guidelines if they are reasonable for the plan. The COVID-19 pandemic has disparate

impacts for different industries (decreasing CBUs for some and increasing CBUs for others),

and some industries may not have returned to normal levels of activity by

December 31, 2021.

In such cases, plans can propose to adopt an alternative CBU assumption with detailed

explanations and supporting rationale and information, per § 4262.5(c) of PBGC’s SFA

regulation.

4. Example #1

Consider Plan X, a plan with a calendar plan year and with an SFA measurement date in

2022. For purposes of Plan X’s pre-2021 (plan year 2020) certification of plan status, 2019

CBUs were 810,000 and CBUs were assumed to decrease by 1.0% per year. Plan X

determines that the CBU assumption is no longer reasonable and proposes to change that

assumption as follows:

o 2022 CBUs (annualized) are assumed to be 4.43%3 (1.5% per year for three years,

compounded geometrically) less than 2019 CBUs. In this example, the 810,000 CBUs for

2019 are reduced for three years (by multiplying each prior year CBU amount by 0.985)

resulting in 774,094 CBUs (annualized) for 2022, a reduction of 4.43% from the 2019

CBUs).

2 The Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19)

Outbreak was signed on March 13, 2020.

3 Change in CBUs between 2019 and 2022 is -4.43%, calculated as (1-.015)3 – 1).

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o CBUs for 2023 through 2029 (the remaining 7 years in the 10-Year Projection Period from

2019) are assumed to be 1.50% less than the amount assumed for the prior year.

o CBUs for 2030 through the plan year ending in 2051 are assumed to be 1.0% less than

the amount assumed for the prior year.

The CBU history for Plan X is shown in the following table. CBUs for 2020 and 2021 do not

factor into the calculation because those plan years contain part of the COVID period.

(A) (B) (C)

Plan Actual Ratio to prior

Year CBUs year

2010 930,000 NA

2011 960,000 1.0323

2012 950,000 0.9896

2013 940,000 0.9895

2014 950,000 1.0106

2015 900,000 0.9474

2016 860,000 0.9556

2017 840,000 0.9767

2018 820,000 0.9762

2019 810,000 0.9878

The geometric average of the numbers in column

(C) is 0.9848. This average is determined by taking

the product of those numbers and raising it to the

1

/9 power. This equates to an average decrease of

1.52% per year [1.0000 - 0.9848 = .0152].

Because the proposed assumption provides for a

decrease (1.50%) during the 10-Year Projection

Period, a rate that is not greater than the average

decrease calculated above, PBGC will generally

accept the changed CBU assumption for this period

(for 2020 through 2029). In addition, because the

proposed CBU assumption for years after 2029

provides for a 1.0% decrease, PBGC will also

generally accept the changed CBU assumption for

the remainder of the SFA projection period.

2020 COVID Period Exclusion

2021 COVID Period Exclusion

Example #2. Consider Plan Y, a plan with a calendar plan year and with an SFA

measurement date in 2022. For purposes of Plan Y’s pre-2021 (plan year 2020)

certification of plan status, 2019 CBUs were 810,000 and CBUs were assumed to increase

by 2.0% per year. Plan Y determines that the CBU assumption is no longer reasonable and

proposes to change that assumption as follows:

o 2022 CBUs (annualized) are assumed to be 810,000, unchanged from the 2019 CBUs.

o CBUs for 2023 through 2029 (the remaining 7 years in the 10-Year Projection Period from

2019) are assumed to be the 810,000.

o CBUs for 2030 through the plan year ending in 2051 are assumed to be 1.0% less than

the amount assumed for the prior year.

CBUs for 2020 and 2021 do not factor into the calculation because those plan years contain

part of the COVID period. The geometric average of the change in actual CBUs from 2010

through 2019 is an average increase of 1.00% per year.

Because the proposed assumption provides for no increase or decrease during the 10-Year

Projection Period, PBGC will generally accept the changed CBU assumption for this period

(for 2020 through 2029). In addition, because the proposed CBU assumption for years after

2029 provides for a 1.0% decrease, PBGC will also generally accept the changed CBU

assumption for the remainder of the SFA projection period.

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Example #3.

Assume the same information as shown in Example #1 for Plan X, but the plan’s SFA

measurement date is in 2024, and the actual CBUs for 2023 are 750,000. For purposes of

Plan X’s pre-2021 (plan year 2020) certification of plan status, 2019 CBUs were 810,000 and

CBUs were assumed to decrease by 1.0% per year. Plan X determines that the CBU

assumption used in the pre-2021 certification of plan status is no longer reasonable and

proposes to change that assumption as follows:

o 2024 CBUs (annualized) are assumed to be 2.25% less than 2023 CBUs. In this example,

the 750,000 CBUs for 2023 are multiplied by 0.9775 (1 - .0225) resulting in 2024 CBUs

(annualized) of 733,125.

o CBUs for 2025 through 2033 (the remaining 9 years in the 10-year period from 2023) are

assumed to be 2.25% less than the amount assumed for the prior year.

o CBUs for 2034 through the plan year ending in 2051 are assumed to be 1.0% less than

the amount assumed for the prior year.

The CBU history for Plan X is shown in the following table. CBUs for 2020 and 2021 do not

factor into the calculation because those plan years contain part of the COVID period.

(A) (B) (C) The geometric average of the numbers in column

Plan

Year

Actual

CBUs Ratio to prior

year

(C) is 0.9770. This average is determined by taking

the product of those numbers and raising it to the

1

/9 power. This equates to an average decrease of

2011 960,000 N/A 2.30% per year [1.0000 - 0.9770 = .0230].

2012 950,000 0.9896 Because the proposed assumption provides for a

2013 940,000 0.9895 decrease (2.25%) during the 10-Year Projection

2014

2015

950,000

900,000

1.0106

0.9474

Period, a rate that is not greater than the average

decrease calculated above, PBGC will generally

accept the changed CBU assumption during the

2016 860,000 0.9556 10-Year Projection Period (for 2024 through 2033).

2017 840,000 0.9767 In addition, because the proposed CBU assumption

2018

2019

2020

820,000 0.9762

810,000 0.9878

COVID Period Exclusion

for years after 2033 provides for a 1.0% decrease,

PBGC will also generally accept the changed CBU

assumption for the remainder of the SFA projection

period.

2021 COVID Period Exclusion

2022 780,000 N/A

2023 750,000 0.9615

Example #4.

Assume the same information as shown in Example #3 for Plan X. In early 2024, prior to

applying for SFA, a new contributing employer joins the plan and is expected to increase the

plan’s 2024 CBUs and 2024 contributions by 50%. Plan X proposes to use the same CBU

assumptions as shown in Example #3.

PBGC preliminarily confirms that the proposed CBU assumption follows the guidelines for a

generally acceptable CBU assumption change. However, the addition of the new contributing

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employer is reasonably expected to increase aggregate 2024 CBUs by 50% which has not

been reflected in the proposed CBU assumption. Based on a reasonable consideration of this

relevant fact, PBGC found the proposed assumption change to be unreasonable because it

significantly understates the expected future CBUs. Note, however, that all relevant facts will

be considered in the assessment of any proposed assumption change.4 Accordingly, the

proposed assumption change described above could be considered reasonable if, for

example, in addition to a new employer joining the plan there were significant withdrawals that

are expected to reduce 2024 CBUs.

B. Proposed change to mortality assumption

PBGC generally will accept a change to the plan’s mortality assumption if the plan’s proposed

mortality assumption is a modified version of the Pri-2012 amount-weighted Blue Collar table

(Pri-2012(BC)) reflecting the plan’s fully credible or partially credible mortality experience, with a

projection scale most recently published by the Retirement Plans Experience Committee of the

Society of Actuaries or any projection scale published by RPEC in the calendar year of the SFA

measurement date (or any subsequent calendar year) or in the two calendar years preceding the

SFA measurement date. 26 CFR 1.430(h)(3)-2 for single-employer plans should be used as a

framework to develop the modified plan-specific mortality table.

For this purpose, references to requesting approval from the Commissioner in 26 CFR

1.430(h)(3)-2(b) are not relevant. References to applicability to all plans in a controlled group in

26 CFR 1.430(h)(3)-2(c)(1) and newly affiliated plans in 26 CFR 1.430(h)(3)-2(f)(2) are also not

relevant.

References in 26 CFR 1.430(h)(3)-2 to the prescribed mortality tables under section 430(h)(3)(C)

of the Internal Revenue Code should be replaced with references to Pri-2012(BC).

References in 26 CFR 1.430(h)(3)-2 to mortality improvement rates should be replaced with

references to any projection scale published by the RPEC in the calendar year of the SFA

measurement date (or any subsequent calendar year) or in the two calendar years preceding the

SFA measurement date.

C. Proposed change to assumptions (other than the SFA interest rate and non-SFA

interest rate) to reflect significant plan experience between the participant census

date and the SFA application date

PBGC generally will accept a change to a plan’s assumptions (other than the interest rates) if the

plan’s proposed assumption is made due to a significant change in plan experience that has

occurred after the participant census date and before the date the application for SFA is filed (or

for a revised application, the date the revised application is filed). However, no such change may

be proposed in a plan’s supplemented application filed under § 4262.4(g)(6) of PBGC’s SFA

regulation.

4 PBGC may request actual CBU experience for periods prior to the application filing date (or revised application

filing date). If the actual CBUs are significantly higher or lower than the projected CBU assumption used in the

development of the plan’s SFA amount, the plan should provide additional support for the reasonability of the

CBU projection or make appropriate adjustments.

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Example

Plan Y’s plan year is the calendar year. The plan is in critical and declining status for the 2020

plan year. The plan files its initial SFA application in March 2025. Its SFA measurement date is

December 31, 2024 (the last day of the third calendar month immediately preceding the date the

plan’s initial application for special financial assistance was filed), and the plan’s participant

census data is as of January 1, 2024, since this is the participant census data used to prepare

the plan’s actuarial valuation report for the plan year (2024) that includes the plan’s SFA

measurement date.

In the pre-2021 certification of plan status, the level of CBUs is assumed to decrease by 1% per

year, and no current contributing employers are assumed to withdraw from the plan.

On January 31, 2025, the plan’s largest contributing employer, who contributed 20% of the total

employer contributions in 2024, withdraws from the plan. The plan determines that its original

assumptions (from its pre-2021 certification of plan status) are no longer reasonable, and makes

the following changes to the assumptions used to determine the requested amount of SFA:

• Reduces the assumed CBUs for 2025 by 20% from the CBUs previously projected for 2025,

• Adjusts its average contribution rate, as needed5

,

• Reflects the expected projected withdrawal liability payments (reflecting if appropriate a

reasonable allowance for amounts considered uncollectible) from the withdrawing employer

in its SFA projections,

• Changes its turnover and retirement assumptions to reflect the termination or retirement of

the employees of the withdrawing employer on January 31, 2025,

• Changes its turnover and retirement assumptions for continuing active participants, as

needed5

,

• Changes its new entrant profile, as needed.5

The plan must provide supporting rationale for why the identified plan experience is significant.

The plan must also provide supporting rationale, data, and information on why using each of the

original assumptions is no longer reasonable, and why the proposed assumptions are

reasonable.

D. Actuarial assumptions used in approved applications under the Multiemployer

Pension Reform Act of 2014 (MPRA)

PBGC will generally accept a change from the assumption used in the pre-2021 certification of

plan status to an assumption used in a plan’s approved MPRA application (including projected

CBUs) if the plan includes the information required under § 4262.5(c) of PBGC’s SFA regulation

in the application and the demonstration provided by the plan shows the assumption is

reasonable for the purpose of determining the amount of SFA.

5 Changes to assumptions should be made if the plan determines that the assumption used is no longer

reasonable based on an analysis that reflects the remaining contributing employers.

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V. Generally not acceptable assumption changes

A. Proposed change to CBU assumption

PBGC generally will not accept a change to the plan’s CBU assumption if:

o The changed assumption includes year-to-year changes that are not adequately supported

by the plan’s historical data, or

o The change is based on speculative changes in industry trends not supported by data.

Given the difficulty of projecting industry trends over a 30-year period for any industry, it is

important that the CBU assumption be supported by historical data and informed by recent

trends.

Speculative industry transformations unsupported by data are not appropriate. For this purpose,

PBGC considers “speculative industry transformations” to mean transformations where little to

no transformation has yet occurred, transformations that are in their infancy, or transformations

that anticipate future adoption of new technologies. For example, PBGC generally will not accept

a CBU assumption that anticipates extreme automation of an industry (e.g., self-driving trucks

replacing all human truck drivers).

A speculative industry transformation does not include a projected transformation that is a

reasonable extension of current technology and trends. For example, a gradual transformation

that replaces grocery store cashiers with self-checkouts.

The CBU guidelines in this document in sections III.A.1., IV.A. and V.A. will help to streamline the

application review process and serve to ensure plans are treated consistently within a given

industry or union.

B. Proposed change to investment expense assumption

PBGC generally will not accept a change to the plan’s investment expense assumption that is

based on a methodology for identifying which classes of expenses are included in the projected

administrative expenses in the deterministic projection used to determine the requested SFA that

is different from the methodology used in the projections used in the pre-2021 certification of

plan status.

For example, PBGC generally will not accept a change from an implicit investment expense

assumption (where expenses are net of the assumed interest rate) to an explicit amount of

investment expenses. Similarly, PBGC generally will not accept a change from an assumption of

no investment expenses paid directly from plan assets to an explicit amount of assumed

investment expenses.

C. Proposed change to assumptions (other than the interest rates) based on shortterm plan experience between the participant census date and the SFA application

date

PBGC generally will not accept a change to a plan’s assumption if the plan’s proposed

assumption is made to reflect short-term plan experience (other than significant plan experience

as described in section IV.C.) that has occurred between the participant census date and the

date the application for SFA is filed (or for a revised application, the date the revised application

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is filed). In addition, no changes to assumptions or methods are allowed which reflect plan

investment experience after the SFA measurement date.

For example, PBGC generally will not accept a change to the plan’s mortality assumption to

reflect the actual mortality experience that occurred after the plan’s participant census date.

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VI. Additional information

A. Actuarial assumptions for certain plans

The description of the actuarial assumptions to be used in the determination of the amount of

SFA under section 4262(e)(2) of ERISA refer to the assumptions used in the plan’s most recently

completed certification of plan status before January 1, 2021. PBGC is aware of certifications of

plan status for some plans in which not all of the actuarial assumptions needed to complete an

application for SFA are specifically documented.

For assumptions not identified or referenced in the pre-2021 certification of plan status, PBGC

will accept the actuarial assumptions actually used to determine the plan’s status to the extent

such actuarial assumptions were communicated in writing by the plan’s actuary to the plan

sponsor, trustee, plan fiduciary other than the trustee, plan’s counsel, plan’s independent

qualified public accountant, or to their representative no later than 90 days after the due date of

the pre-2021 certification of plan status. To use such actuarial assumptions, the applicant should

provide a copy of the communication containing the actuarial assumptions and a statement

signed under penalty of perjury by the recipient of the communication authenticating the

communication and the date of receipt.

For assumptions not identified or referenced in the pre-2021 certification of plan status or

evidenced by a contemporaneous written communication as described above, PBGC will

consider the actuarial assumptions documented in the Form 5500 Schedule MB filed for the plan

year ending immediately before the pre-2021 certification of plan status was certified to be the

same as those used for the pre-2021 certification of plan status.

For example, the pre-2021 certification of plan status for a plan using a calendar plan year was

issued on March 29, 2020. The pre-2021 certification of plan status did not document any

actuarial assumptions used in the certification and there was no contemporaneous written

communication of those actuarial assumptions by the plan’s actuary. In these circumstances, an

application for SFA should be based on the actuarial assumptions documented in the plan’s

2019 Form 5500 Schedule MB.

If the Form 5500 Schedule MB to Form 5500 does not include all of the assumptions that are

needed to determine the amount of SFA (such as a projection of contribution base units,

contribution rates, withdrawal liability payments, new entrant profile and/or administrative

expenses), then the plan actuary should select assumptions that represent their best estimate of

future experience as of the valuation date on the Schedule MB and should include detailed

explanations and supporting rationale and information as to why these assumptions are

reasonable. These assumptions will be treated as changed assumptions for all purposes of

PBGC’s review, except that these changed assumptions are included in the “Baseline” details.

Plans may propose to change the assumptions determined in any of the above ways for

purposes of the determination of SFA amount only if the plan includes the information required

by § 4262.5(c) in the application and the plan’s demonstration shows the assumption is

reasonable.

B. Actuarial assumptions for withdrawal liability payments

When projecting future receipt of employer withdrawal liability payments for purposes of

determining the amount of SFA, the plan’s actuary should consider reflecting a reasonable

allowance for amounts considered uncollectible.

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C. Assumption changes regarding “missing” terminated vested participants

Section III.F. provides background and identifies a change in assumptions with respect to

“missing” terminated vested participants that PBGC will accept as reasonable.

If a plan proposes a change in such assumptions other than the acceptable assumption change

described in section III.F., PBGC will assess the reasonableness of the proposed change

regarding the inclusion of certain previously excluded terminated vested participants by assessing

the information and supporting rationale and analysis provided by the plan. The plan should

provide experience data that supports that it is reasonable to assume that the participants now

included for determining the amount of SFA will eventually apply for benefits.

In addition to experience data and rationale described above, the SFA application should include

the following information:

o A listing (including relevant data items such as current age or date of birth, gender,

assumed payment age or date, benefit amount at normal retirement date, benefit amount

at assumed payment age or date, lump sum retroactive benefit payment as of SFA

measurement date if applicable) of the participants whose benefits were excluded from the

measurement of liabilities in the most recent actuarial valuation that would be included in

the determination of the amount of SFA,

o A description of the plan’s policies and procedures for locating missing participants as well

as the specific efforts that the plan has made to locate such participants, and

o Details of a recent death audit (performed not earlier than one year prior to the SFA

measurement date) demonstrating that there is no readily available information indicating

that any such participants are deceased as of the SFA measurement date. Remove any

"'missing' terminated vested participants" that are known to be deceased after the census

data date and before the SFA measurement date. This requirement is only for this

assumption which is in contrast to Section B(9) of the General Instructions for

Multiemployer Plans Applying for Special Financial Assistance.

D. Hard-to-Value assets for SFA applications

Hard-to-value assets, such as private equity, hedge funds, or real estate are required to be

measured on the SFA measurement date. Whenever possible, applicants on behalf of plans

applying for SFA should request values of hard-to-value assets from the plan’s fund managers.

The use of good-faith estimates provided by fund managers as of the SFA measurement date

will be treated as “acceptable” assumptions, as that term is used in PBGC’s published SFA

Assumptions Guidance on www.pbgc.gov. Documentation of the estimated values provided by

fund managers may be requested by PBGC during the review of the SFA application.

If an applicant has made a good faith effort to obtain estimated values as of the SFA

measurement date from the fund managers, but the fund manager cannot or will not provide such

an estimate, then applicants should make reasonable estimates of the value of these assets as of

the SFA measurement date. Possible approaches for an applicant to use in making estimates

include:

1. Adjusting the last value reported by the fund manager for the period between the reporting

date and the SFA measurement date based on the change in investment indices that reflect

the same investment characteristics as the relevant plan holding. For example, hard-to-value

assets that resemble equities could be adjusted with the change in an appropriate total return

public market equity index.

2. For hard-to-value assets for which method #1 above is not appropriate, any reasonable

method accompanied by a clear description and supportive rationale could be used.

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3. For hard-to-value assets for which no reasonable method of adjustment can be determined,

an annualized rate of return equal to the non-SFA interest rate limit used in the application

may be used. This type of adjustment should be accompanied by an explanation of why the

previous adjustment methods are not appropriate.

In general, valuing the investment at the last value either reported by the fund manager or used in a

plan audit will not be considered reasonable if that value was determined more than one month

prior to the SFA measurement date.

E. Nonbinding guidance

This guidance represents PBGC’s current thinking on this topic. It does not create or confer any

rights for or on any person or operate to bind the public. A plan can use an alternative approach if

the approach satisfies the requirements of the applicable statutes and regulations.

F. Department of Labor advisory

With respect to assumption changes regarding “missing” terminated vested participants (see

sections III.F. and VI.C.), the Department of Labor advises that PBGC’s acceptance of such an

assumption change to determine the amount of Special Financial Assistance has no effect on

the obligations of plan fiduciaries to maintain complete and accurate records (to include updated

addresses), conduct a prudent search for missing participants, communicate with participants

and beneficiaries nearing or past retirement age, or to pay benefits when due under title I of

ERISA. See Missing Participants – Best Practices at

https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-andcompliance/retirement/missing-participants-guidance/best-practices-for-pension-plans.

G. Contact information

For questions about this guidance, please email the general Multiemployer Program Division

mailbox at multiemployerprogram@pbgc.gov, and include as the subject “Special Financial

Assistance Question from (Plan Name).”

For comments on this guidance, please submit your comments, including your contact

information, to the General Counsel at GuidanceComments@pbgc.gov, and include as the

subject “Special Financial Assistance Comment from (Plan Name).”

A plan sponsor may request an informal pre-application consultation to discuss a plan’s potential

application for SFA. At a pre-application consultation, PBGC staff members cannot offer binding

decisions on such topics as a plan’s eligibility for SFA or the amount of SFA to which it might be

entitled. However, staff members can provide overviews of the SFA program and the application

process and offer helpful tips. To request a pre-application consultation, send an email to the

general Multiemployer Program Division mailbox at multiemployerprogram@pbgc.gov, with the

subject “Special Financial Assistance Consultation Request from (Plan Name).” You may send

other questions about the SFA program to this email address as well, with the subject “Special

Financial Assistance Question from (Plan Name).”

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