01.09.26
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Milliman: Corporate Pension Funding UP – Again!

By: Russ Kamp, CEO, Ryan ALM, Inc.

Milliman released its monthly Milliman 100 Pension Funding Index (PFI), which analyzes the 100 largest U.S. corporate pension plans. They reported that the funded ratio has now improved for nine straight months – impressive! As of December 31, 2025, the funded ratio for the index constituents is 108.1%, which is up substantially from year end 2024’s 103.6%.

The increase in the funded ratio for December (and the year) was mostly driven by the performance of the assets for the index’s constituents that saw an 11.32% average return for the year, increasing asset values by $53 billion. A rather stable interest rate environment lead to only a $1 billion decline in the PV of those FV liabilities.

According to Zorast Wadia, author of the Milliman 100 Pension Funding Index report, “discount rates fell during the year, and this trend could extend into 2026, potentially reversing some of the recent funded status gains and underscoring the continued need for prudent asset-liability management.” We couldn’t agree more.

It was the significant decline in U.S. interest rates during a nearly four decade bull market for bonds that really crushed funding for private DB pension plans. It would be tragic to witness a deterioration in the funded ratio/status after reclaiming a strong financial footing. Secure those promises and sit back and enjoy managing surplus assets.

Here is the link to the full December report: View this month’s complete Pension Funding Index

01.09.26
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Ryan ALM, Inc. Q4’25 Newsletter

By: Russ Kamp, CEO, Ryan ALM, Inc.

We are pleased to provide the Ryan ALM, Inc. Q4’25 Newsletter that explores both asset and liability performance for both Q4’25 and calendar year 2025. As you will read, asset growth has exceeded liability growth for both public and private pension plans. Funding continues to improve despite the recent fall in U.S. interest rates that increase the present value of pension liabilities.

Please don’t hesitate to reach out to us with any questions that you might have regarding this publication. Also, please call on us if you’d like to explore a cash flow matching (CFM) strategy to learn how you can reduce risk within your current asset allocation. Thank you for your continuing support of Ryan ALM, Inc. and our mission to protect and preserve defined benefit plans.

01.05.26
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ARPA Updated as of January 2, 2026

By: Russ Kamp, CEO, Ryan ALM, Inc.

Happy New Year! We, at Ryan ALM, wish for you and yours an incredible 2026. May all your pension liabilities be covered and secured.

The PBGC has updated its ARPA spreadsheet after not updating it for the week of 12/26/25. The January 2, 2026, update highlights one application that was submitted, another that was withdrawn, and five new additions to the waitlist. Let’s get into the detail.

Teamsters Local 277 Pension Fund has submitted a revised application. This non-priority pension plan is seeking $18.3 million for its 1,633 participants. The PBGC has until April 21, 2026, to complete its review. In other ARPA news, Columbus, OH based Bricklayers Local No. 55 Pension Plan withdrew its initial application. They are trying to secure $8.7 million in Special Financial Assistance (SFA) for their 483 members.

In addition, there were no applications approved during the prior two weeks, nor were there any plans denied or asked to repay a portion of the SFA due to census errors. The last plan to repay a portion of the SFA proceeds did so back in September.

However, another five pension funds added their names to the waitlist bringing the total non-priority plans to 193, with more than 80 of those not submitting an application by the legislation’s deadline of December 31, 2025. It will be very interesting to see what happens to those plans at this time. As a reminder, revised applications can be submitted until December 31, 2026.

Again, we wish for you and yours an incredible 2026. Hopefully, the U.S. interest rate environment continues to provide recipients of SFA the opportunity to defease future benefits and expenses at attractive rates lowering the cost to secure those promises.

01.02.26
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Year-end Interest Rate Update

By: Russ Kamp, CEO, Ryan ALM, Inc.

Despite FOMC action that reduced the Fed Funds Rate from 4.25%-4.50% to 3.5%-3.75%, the yield on the U.S. 30-year Treasury bond was higher at 12/31/25 (4.85%) than at year-end 2024 (4.79%). The Treasury yield curve became much steeper during the year as the spread between 2-year notes and 30-year bonds grew from 0.54% to 1.37%. Given the steepness in the YC, using a cash flow matching vertical slice for a portion of the pension plan’s liabilities will provide far greater cost reduction than a 100% CFM for a shorter period. Just something to consider as you look to remove some risk from your DB plan’s AA.

Bond Math and A Steepening Yield Curve – Perfect Together!
12.30.25
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Pension Reform or Just Benefit Cuts?

By: Russ Kamp, CEO, Ryan ALM, Inc.

According to NIRS, at least 48 U.S. states undertook significant public pension reforms in the years following the global financial crisis (GFC), with virtually every state making some form of change to its public pension retirement systems. I’ve questioned for some time that those “reforms” were nothing more than benefit cuts. When I think of reform, I think of how pension plans are managed, and not what they pay out in promised benefits. However, this wasn’t the case for those 48 states which mostly asked their participants to contribute more, work for more years, and ultimately get less in benefits.

Equable Institute released the second edition of its Retirement Security Report, a comprehensive assessment of the retirement income security provided to U.S. state and local government workers. The report evaluated 1,953 retirement plans across the country to determine how well public employees are being put on a path to secure and adequate retirement income. Unfortunately, the reports findings support my view that pension reforms were nothing more than benefit cuts. Here are a couple of the points:

“Retirement benefit values have declined significantly: The expected lifetime value of retirement benefits for a typical full-career public employee has dropped by more than $140,000 since 2006, primarily due to policy changes after the Great Recession such as higher retirement ages, longer vesting, and reduced COLAs.“

“Only 46.6% of public workers are being served well by their retirement plans.“

Yes, newer plan designs are allowing for greater portability through hybrid and defined contribution plans, but as I’ve discussed in many blog posts, asking untrained individuals to fund, manage, and then disburse a “benefit” without the necessary disposable income, investment acumen, and a crystal ball to help with longevity issues is poor policy. We have an affordability issue in this country and it is being compounded by this push away from DB pensions to DC offerings.

Pension reform needs to be more than just benefit adjustments. We need a rethink regarding how these plans are managed. As we have said on many occasions, the primary objective in managing a pension plan is not one focused on return, which just guarantees volatility in outcomes. Managing a pension plan, public or private, should be about securing the promises that were given to the plan’s participants. That should be accomplished at a reasonable cost and with prudent risk.

Regrettably, most pensions are taking on more risk as they migrate significant assets to alternatives. In the process they have reduced liquidity to meet benefits and dramatically increased costs with no promise of actually meeting return projections. Furthermore, many of the alternative assets have become overcrowded trades that ultimately drive down future returns. Higher fees and lower returns – not a great formula for success.

It is time to get off the performance rollercoaster. Sure, recent returns have been quite good (for public markets), but as we’ve witnessed many times in the past, markets don’t always cooperate and when they don’t, years of good performance can evaporate very quickly. Changing one’s approach to managing a pension plan doesn’t have to be revolutionary. In fact, it is quite simple. All one needs to do is bifurcate the plan’s assets into two buckets – liquidity and growth – as opposed to having 100% of the assets focused on the ROA. Your plan likely has a healthy exposure to core fixed income that comes with great interest rate risk. Use that exposure to fill your liquidity bucket and convert those assets from an active strategy to a cash flow matching (CFM) portfolio focused on your fund’s unique liabilities.

Once that simple task has been done, you will now have SECURED a portion of your plan’s promises (benefits) chronologically from next month as far into the future as that allocation will take you. In the process the growth assets now have a longer investing horizon that should enhance the probability of achieving the desired outcome. Contribution expenses and the funded status will become more stable. As your plan’s funded status improves, allocate more of the growth assets to the liquidity bucket further stabilizing and securing the benefits.

This modest change will get your fund off that rollercoaster of returns. The primary objective of securing benefits at a reasonable cost and with prudent risk will become a reality and true pension reform will be realized.

12.29.25
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A Time to Look Back

By: Russ Kamp, CEO, Ryan ALM, Inc.

Nearly eight years ago (2/28/18), I produced a blog post titled, “Let’s Just Cut Them Off!”, in which I took offense to an article trashing pension legislation then referred to as the “Butch Lewis Act” (BLA). The writer of the article, Rachel Greszler, The Heritage Foundation, stated that the BLA (as well as other potential solutions at that time) were nothing more than tax-payer bailouts.  She estimated that these bailouts could amount to as much as $1 trillion. I stated at that time that “I don’t know where she has gotten this figure, but it is not close to reality.”

Ms. Greszler defined the potential recipients of these loans (now grants) as the entire universe of multi-employer plans totaling roughly 1,375 (at that time) with an unfunded liability of $500 billion.  However, the Butch Lewis Act, and subsequently ARPA) was only designed for those plans that were designated as “Critical and Declining”.  The total amount of underfunding for that cohort was roughly $70 billion.  A far cry from the $1 trillion that she highlighted above.

So, where are we today? I’m happy to report that as of 12/19/25, the PBGC has approved Special Financial Assistance to 151 pension plans totaling $75.2 billion. These grants are ensuring that 1,873,112 American workers will receive the retirement benefits they were promised! Amazing!

In my original post, I wrote “given the author’s concern for the million or so union workers whose benefits may be trashed, she certainly doesn’t propose any solutions other than to say that a “bailout” is a horrible way to go.  If these plans don’t receive assistance, they are likely to fail, placing a greater burden on the Pension Benefit Guaranty Corporation (PBGC), which is already financially troubled.” Fortunately, through the ARPA pension legislation, the PBGC’s multiemployer insurance fund is stronger today than it has been in decades.

I finished my post with the following thoughts: “Retirement benefits stimulate economic activity, and usually on the local level. The loss of retirement benefits will have a direct impact on these economies. Also, these benefits are taxed, which helps pay for a portion of the loans (now grants). Doing nothing is not an answer. I applaud the effort of those individuals who are driving the Butch Lewis Act. I encourage everyone to reach out to your legislatures to educate them on the BLA and to gain their support. There are millions of Americans who need your support.  Thank you!”

I was thrilled to work with Ron Ryan and the BLA team headed by John Murphy and David Blitzstein. It remains one of the highlights of my 44-year career. Who knew when I began working with Ron and that team it would lead me to eventually join Ryan ALM, Inc. We continue to fight to protect and preserve DB pensions for the masses. There is a ton of work remaining to do. Securing those promises through cash flow matching (CFM) is an important first step. Let us help you accomplish that objective.

12.29.25
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ARPA Update as of December 26, 2025

By: Russ Kamp, CEO, Ryan ALM, Inc.

I hope that you and your families are enjoying a wonderful holiday season. It appears that our friends at the PBGC are in full celebration mode as the weekly update has yet to be posted to their website (PBGC.gov). I know that they remain incredibly busy given the roughly 124 plans that are either in the process of having applications reviewed or still waiting to submit an application seeking Special Financial Assistance (SFA).

I’ll provide an update when one becomes available. In the meantime, I hope that we all have a joyful, healthy, and prosperous New Year in 2026.

12.24.25
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It’s Not Getting Any Easier

By: Russ Kamp, CEO, Ryan ALM, Inc.

I wish for you and your family, friends, and acquaintances a joyous holiday season. I hope that 2026 proves to be an incredibly wonderful year in which the average American once again prospers. As regular readers of this blog know, I mostly focus my attention of DB pension plans, but I’ll occasionally write about the struggles that the American worker faces funding a defined contribution (DC) plan, such as a 401(k). A few months back, I wrote about the burden of homeownership on the American worker and the impact paying roughly 50% of the median household income has on one’s ability to then fund a retirement program.

Unfortunately, it isn’t getting any easier. I read today in the WSJ that the average monthly car payment is now >$750 per month. Oh, my! It is leading buyers of these cars to take out 8-, 9-, and 10-year auto loans. Can you imagine the interest that is paid on a 10-year loan? I suspect that most of today’s car buyers aren’t buying Lamborghinis. Folks not living in areas where mass transportation is abundant are forced to have a car available to get them to work. It is an essential expenditure, just as owning or renting a home/apartment.

In addition, I read yesterday that wage growth continues to moderate, with average hourly earnings only increasing by 3.5% for the 12-months ending November 30, 2025. That represents the slowest pace since 2021, and well below the near 6% peak reached in early 2022. As a result, an incomprehensible 57% of Americans rely on financial support from family or friends. Among parents with adult children, 40% provide ongoing support, with 53% drawing on retirement savings to provide the assistance. Given the cost of housing, it shouldn’t be surprising that 49% live with their adult children or more likely, the adult children are living with them.

Given these financial realities, do we really believe that self-funding a retirement program is truly in the cards for the average American worker? The financial burdens placed on them through costs associated with housing, healthcare, education, childcare, transportation, food, utilities, etc. is crushing. We have a bifurcated society at this time with too few halves actively participating. I don’t think that works longer-term for any economy. It certainly is not going to work when roughly 20% of the American population is 65-years old or older by an estimated 2030.

12.22.25
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ARPA Update as of December 19, 2025

By: Russ Kamp, CEO, Ryan ALM, Inc.

Welcome to the start of Christmas week. I wish for all you and your families a joyous holiday season and an incredible 2026!

So, are we witnessing the winding down of the ARPA pension legislation as far as new applications are concerned? As I’ve reported numerous times, the legislation stated that all initial applications have to be submitted by December 31, 2025. Applications that have been withdrawn and needing to be revised can be resubmitted through December 31, 2026. Yet, I haven’t seen anything recently on the PBGC’s website. There remain dozens of waitlist candidates at this time.

Regarding last week’s activity, these four pension plans were permitted to file an initial application seeking Special Financial Assistance (SFA), including 1) Bricklayers and Stonemasons Local Union #2 Pension Plan, 2) Communications Workers Local 1109 Pension Plan, 3) Local 1430 I.B.E.W. Pension Plan, and 4) District Council 37 Local 389 Home Care Employees Pension Fund. These four relatively small non-priority plans (<10k participants combined) are seeking $85.8 million in SFA.

In other ARPA news, Alaska United Food and Commercial Workers Pension Fund received approval for their SFA revised application. This non-priority plan will receive $109.1 million in SFA for 6,106 members of their pension plan. Fortunately, there were no applications denied due to eligibility issues, no plans were asked to refund a portion of their SFA due to census errors, and no new applicants were added to the waitlist. However, multiple plans locked in their valuation dates (all 9/30/25) and it appears that all waitlist pension plans have a committed valuation date.

As highlighted above, there remain 78 waiting list applicants hoping to get approval from the PBGC to submit an SFA application. I just don’t see that happening before year-end, especially given the fact that the PBGC’s e-Filing portal remains temporarily closed. Again, Happy Holidays!

12.18.25
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Get Real!

By: Ronald J. Ryan, CFA, Chairman, Ryan ALM, Inc.

The CPI was released today, and it showed annual inflation at 2.7%, which is much better than the 3.1% estimated. Markets have rejoiced so far with stocks and bonds UP in price and DOWN in yield. But isn’t it real rates (nominal rate – CPI) that are more critical for investors than nominal rates. According to the 70-year study by famed economist Ed Yardeni and the 40-year study by the Fed of St. Louis (FRED)… real rates have averaged 2.0% historically (see graphs). If we add a 2.00% inflation premium to today’s rates, the 10-year Treasury should be yielding about 4.70% instead of 4.17%. Maybe the market is discounting future inflation expectations but until a lower inflation trend line is firmly established, it seems like interest rates should be at least 50 basis points higher.