Asbestos Workers Philadelphia Pension Fund

Special Financial Assistance is a program administered by the Pension Benefit Guaranty Corporation under the American Rescue Plan Act of 2021. Congress allocated roughly $36 billion to cover projected benefit shortfalls in critically underfunded multiemployer pension plans through 2051. The Asbestos Workers Philadelphia fund's participant base — insulation workers from a shrinking trade — could no longer support promised payouts from employer contributions and investment returns alone. Receiving SFA means the PBGC effectively backstops the fund and restricts how assets may be invested.

A board of trustees jointly selected by the International Association of Heat and Frost Insulators Locals 14 and 89 and participating employers governs the fund. Stephen F. Pettit is a publicly named trustee, but no internal investment staff or CIO is identified. Given the fund's distressed status prior to its SFA grant, investment management has historically been outsourced to external institutional managers and investment consultants, a standard practice for smaller multiemployer plans.

Yes, but with binding constraints. PBGC SFA final rules require that a fund's existing non-SFA assets — any assets held before the grant — remain invested prudently under ERISA. However, the SFA grant assets themselves must be placed in investment-grade fixed income and cash equivalents designed for principal preservation. The fund's posture has shifted from growth-seeking to liability-matching, and new illiquid commitments are effectively off the table.

Both funds serve the same union membership — the insulation workers of Locals 14 and 89 — but they cover different benefits. The Pension Fund handles retirement benefits, while the Welfare Fund provides active health, disability, and ancillary benefits. They operate in tandem under a shared governance framework, but are legally and financially separate entities. Trustee Stephen F. Pettit is connected to both.

The fund covers mechanical insulation workers, demand for whom is tied to industrial construction, retrofitting, and maintenance — including energy and petrochemical facilities. A rollback of environmental permitting constraints could increase employer contributions to the fund by expanding project volume (per the Mechanical Insulators Labor Management Cooperative Trust, 2025). However, the fund's own SFA-restricted investment posture means it captures none of that upside directly; the benefit accrues to improving its contributing employer base, not its own portfolio.