06.17.26
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Just Another Meme Stock?

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

Equity markets are partying like it’s 1999! Valuations be damned! Are the improved funded ratios for defined benefit plans going to be secured through de-risking strategies or are they going to once again be subjected to the whims of the capital markets? For plan sponsors benchmarking your equity exposure to the S&P 500, are you prepared for the volatility potentially associated with the great technology concentration (now roughly 50% of the index)? For those invested in the Nasdaq indexes, are you prepared for SpaceX’s impact, which should happen soon?

Come on, folks. Let’s not repeat the mistakes of the past. Higher interest rates, higher inflation, crazy equity valuations, and geopolitical uncertainty have not seemed to tamp enthusiasm for U.S. stocks. What will? Will it take a stock like SpaceX – now valued at $2.75 trillion – to be the reason that stocks fall back to earth? SpaceX has been trading for three days. The action on the stock suggests that it is just another meme stock.

Can you believe that SpaceX has overtaken Amazon as America’s fifth-largest company? A closer examination of the fundamentals shows just how irrational our markets/investors have become. Let’s look at the current fundamentals of Amazon versus SpaceX.

Valuation

MetricSpaceXAmazon
Revenue$19.30B TTM $716.9B in 2025 
Earnings-$9.36B TTM $77.7B net income in 2025 
P/S137.7x about 3.5x 
P/E-284.2x about 34x normalized 

SpaceX’s valuation is being priced as an extraordinarily high-growth story, despite being a money-losing company, which is why its P/S is dramatically higher than Amazon’s. Amazon, by contrast, already has large-scale revenue and meaningful profitability, so its valuation looks much more grounded in current fundamentals, despite it carrying a rich valuation at 34x normalized earnings.

Profitability

Amazon is clearly ahead on earnings quality: it generated $80.0B of operating income and $77.7B of net income in 2025. SpaceX, on the other hand, reported a $9.36B trailing-twelve-month loss and a negative net margin.

Growth profile

Clearly, SpaceX’s case is mostly about future optionality: investors are paying for expected expansion in launch, satellite, and adjacent businesses rather than present-day profits. Amazon’s case is more balanced because it combines growth with profitability, especially from AWS and advertising, which support its margins.

SpaceX will need to increase sales by roughly 37x to match Amazons P/S of 3.5x. Nothing grows to the heavens – even a rocket company. Risks to pension funding seem to be skewed to the downside. It is time to take some profits and secure the promises that have been given to your plan participants. Please don’t waste another golden opportunity to fortify your plan’s funding.

06.15.26
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ARPA Update as of June 12, 2026

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

Welcome to the middle of June. We finally had a beautiful weather weekend in NJ. Hope that your’s was wonderful, too. Congrats to the Knicks on their first championship since 1973. I won’t share how old I was when they last won, but I remember it very well.

Regarding ARPA and the PBGC’s effort to implement this critical pension legislation, they seem to be in a holding pattern currently. As we witnessed last week, there were no new applications submitted to the PBGC, none of the applications before the PBGC were approved. Bricklayers Local No. 55 Pension Plan must have its application acted on by June 25th or they automatically receive the SFA that they have sought ($6.4 million).

Importantly, no applications were either denied or withdrawn. Furthermore, no action has been taken regarding the 80 Mass Withdrawal funds sitting on the waitlist. As previously mentioned, there remains just one fund on the original waitlist that has yet to submit an application.

Despite the lack of activity, we will continue to provide our weekly update. Hopefully, something will develop soon regarding the roughly 28 plans that have withdrawn applications and the 84 that have yet to submit one. Congrats to the 161 plans that have been awarded SFA (and interest).

06.12.26
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Try Clapping With One Hand

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

The only reason that your DB pension plan exists is because a promise was given to your participants that they would receive a monthly benefit for life upon meeting some requirements such as years employed and retirement age. The promise wasn’t based on whether your particular pension fund achieved the annual return on asset assumption (ROA). If the ROA was achieved – great. Contributions would be as forecasted by your actuary. If not, it would be time to ante up more in annual contributions. But at the end of the day, you remain on the hook to make that monthly payment.

Given that reality, does it make sense that the primary focus is on the ROA and not the promised benefits? Regrettably, for most of Pension America, the annual ROA is the goal. However, pursuing that objective only guarantees volatility and not success. On the other hand, we, at Ryan ALM, Inc., believe that the primary pension objective is to SECURE the promised benefits at a reasonable cost and with prudent risk. By securing that promise, you eliminate uncertainty and volatility in the funded status.

Here’s the rub, the pension liabilities are the domain of the actuaries, while asset allocation falls to the asset consultants. How often do those entities communicate? How often do you as the plan sponsor know how that promise you made is behaving? Does it make sense to you that assets are constantly being measured while the liabilities may get a once per year update 4-6 months delayed? Wouldn’t it make much more sense to have both the assets and liabilities updated at the same time so that asset allocation adjustments could be made as necessary?

Think about a bridge with two primary supports. One of the supports are representative of the actuaries and the other one is the asset consultants. To get from one side of the pension canyon to the other side, there needs to be a connector. What entity is that? It is not your investment managers, who are focused on a generic benchmark and not your plan’s liabilities. Ryan ALM believes that we can be that entity, as we provide a turnkey system of sustainable solutions to make sure that each pension fund that we support understands the promises that have been made, develops the correct cash flow roadmap, and carefully constructs the necessary match between liability cash flows of benefits and expenses with the asset cash flows (principal and interest) from IG bonds to SECURE those monthly promises.

Our mission is to secure your promises at both low cost and with prudent risk. It is not to have you sit firmly on the rollercoaster of market returns with the hope that the plan’s asset allocation will deliver a return near the ROA. The current breakdown in communication between actuaries and asset consultants is like trying to clap with one hand. As hard as you try, it just won’t work. Let Ryan ALM be your bridge. With us you’ll receive a monthly Custom Liability Index (CLI) based on your fund’s forecasted liabilities, monthly liquidity chronologically as far into the future as your allocation to a cash flow matching (CFM) mandate covers, time for the residual assets (alpha assets) to grow, low cost management fees, ongoing monitoring of the relationship of assets to liabilities, and a stable funded ratio and contribution expenses for that portion of the plan. We connect assets to liabilities through our proprietary turnkey system of four products. Think of us as the maestro leading the orchestra. Both hands are working for you and your participants.

06.10.26
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Ryan ALM, Inc. – We Offer A Turnkey System

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

Ryan ALM helps defined benefit pension plans understand and manage the COMPLETE economics of their pension promise. Using cash flow projections of contributions, benefits, and expenses, the Ryan organization uses its proprietary liability valuation methodologies (ASC 715 discount rates), its trademarked Custom Liability Index (CLI), and our cash flow matching strategy that we call the Liability Beta Portfolio (LBP) to develop investment SOLUTIONS designed to align plan asset cash flows with liability cash flows. It is the SECURING of those future obligations that should be the paramount activity when managing a pension plan.

We refer to this process as a turnkey system, which Ron Ryan, Ryan ALM’s Chairman, recently described in great detail. We believe that our firm is unique in this regard. Unfortunately, pension plans today receive an actuarial update at most once per year, perhaps 4-6 months delayed. They rely on their asset consultants to create an asset allocation that should reflect the funded status but often the allocations are driven by the ROA. Investment managers are then retained to manage strategies based on the asset allocation, but not the plan’s liabilities. That seems pretty disjointed to us.

Ryan ALM’s competitive advantage is its proprietary turnkey system that integrates:

  • Liability valuation through discount-rate modeling
  • Cash-flow forecasting
  • Liability benchmark construction
  • Portfolio implementation
  • Ongoing monitoring

A true repeatable framework focused on the long-term SUSTAINABILITY of pension plans. Most pension plans don’t have such a system. They receive quarterly investment reports and annual actuarial valuations, but nobody integrates the assets and liabilities into a synergistic decision-making framework. Have you ever wondered: “How has the plan’s financial health changed since our last meeting, and what risks should we be paying attention to?” If not, you should be. Do you know where your liquidity is going to come from to meet those ongoing monthly obligations?

Ryan ALM would be happy to provide you with a free cash flow analysis based on our proprietary turnkey system. Given significant uncertainty today, a short 30-minute conversation followed by our analysis could ensure that your fund is set up for long-term success.

06.09.26
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Milliman: Corporate Pension Funding at 25-Year High

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

Ryan ALM, Inc. prides itself on providing pension sustainability solutions. Working with DB pension plans of all funding levels is what motivates and drives us. As a result, we pay close attention to the current funded status of Pension America. We greatly appreciate the work that Milliman does in providing monthly updates on the health of both private and public pensions.

We are pleased to share the output from the Milliman 100 Pension Funding Index (PFI), which, as a reminder, analyzes the 100 largest U.S. corporate pension plans. Given the strong rally in U.S. equities, it is not surprising to see that the collective funded status of the Milliman 100 PFI plans improved by $18 billion during May. As a result, the funded ratio rose from 108.2% as of April 30, to 109.6% as of May 31st. This represents the high water mark in pension funding since July 2001, when it stood at 109.9%.

Milliman also reported that plan liabilities also rose during the month, to $1.208 trillion, as the discount rate used to value those future promises fell 4 bps, to 5.62%. Fortunately, the growth in pension liabilities was not enough to offset investment gains of 2.22% for the cohort. The combined assets grew $22 billion during the month to $1.324 trillion, while the funded status surplus reached $116 billion. 

“May’s robust returns pushed corporate pensions further into surplus territory, to a level not seen in nearly 25 years,” said Zorast Wadia, Milliman PFI author. “Plan sponsors that haven’t yet pursued de-risking opportunities may want to review their options, as conditions remain highly favorable.” We couldn’t agree more with Zorast. Rising interest rates reduce the present value of those future promises. Defeasing pension liabilities at these rates will lock in the relationship of assets to liabilities.

Markets will do what markets do. Interest rates will rise and fall. Economic uncertainty will come and go. The question is whether your pension plan is structured to withstand those events without jeopardizing the promises made to participants. Don’t subject your pension plan to unnecessary market risk. You’ve worked too hard to get funding to this level.

View this month’s complete Pension Funding Index.

06.08.26
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ARPA Update as of June 5, 2026

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

I hope that this ARPA update finds you doing well.

As we’ve been reporting, the ARPA program is winding down. As a result, the PBGC’s weekly updates are becoming briefer. In the latest week, Building Trades Pension Fund of Western Pennsylvania, submitted a revised SFA application seeking $39.7 million for 3,907 plan members. The PBGC has until September 29th, to act on the application. With this filing, there are currently eight applications before the PBGC.

Following this submission there remains 29 withdrawn applications that will likely be presented to the PBGC again. Six of those applications are for priority Group members. However, the PBGC’s eFiling portal remains temporarily closed.

Bricklayers Local No. 55 Pension Plan’s application “matures” on June 25th. The PBGC must act on this filing by that date or the fund automatically gets approval for the SFA request.

Nothing new to report on the 80 applications currently on the waitlist that were impacted by the plan being terminated by mass withdrawal before 2020 Plan Year. We continue to monitor this situation and will report as updates become available. Lastly, higher U.S. interest rates continue to provide recent recipients of SFA the opportunity to lock in significant cost reduction on their plan’s future benefit obligations.

06.05.26
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It is Our Mission!

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

The individual professionals on the Ryan ALM, Inc. team have both a personal and professional mission which drives us every day! What is that mission? We are driven with the goal of protecting and preserving defined benefit pension plans, which we believe are the only true retirement plans. Any other “retirement” vehicle pales in comparison. Yet, our industry has adopted practices which we believe are detrimental to the long-term stability of these critically important plans.

Pursuing an objective focused on return has created an environment that has these DB plans on a perpetual rollercoaster of performance, ultimately creating unnecessary instability and uncertainty as it relates to both contributions and funded status. As a reminder, we believe that the primary objective in managing a DB pension plan is to SECURE the promised benefits at a reasonable cost and with prudent risk. It is not a performance objective.

Recently, I reviewed a pension plan that believed its biggest challenge was improving returns. After examining its cash flow needs, we discovered the larger issue was liquidity. By addressing liquidity first, the trustees reduced risk, a key action in these uncertain times, while improving confidence in their ability to meet future benefit payments. Furthermore, most trustees I speak with are wrestling with the same issues—liquidity, uncertainty, and how much risk is appropriate at this stage of the investing cycle.

Through Cash Flow Matching (CFM), a dedicated investment-grade bond portfolio in which we carefully match asset cash flows of principal and interest against the liability cash flows of benefits and expenses, we are able to bring certainty to your cash flow needs through enhanced liquidity. I’d be happy to walk through your plan’s cash flow profile and show you how a cash flow matching approach would support your current asset allocation.

Every pension plan is different, but every trustee shares the same responsibility: ensuring promised benefits are paid. Markets will do what markets do. Interest rates will rise and fall. Economic uncertainty will come and go. The question is whether your pension plan is structured to withstand those events without jeopardizing the promises made to participants.

If you’re not completely certain that your fund is structured appropriately, let us at Ryan ALM work with you to protect and preserve your DB plan, as it is our collective mission. Your fund’s participants will appreciate knowing that their promised benefits have been secured for some period of time. If you’d like a second opinion on your plan’s liquidity profile, cash flow needs, or overall asset allocation strategy, let’s talk. A 30-minute conversation may help you see risks—and opportunities—that aren’t visible through a funded ratio or return assumption lens.

06.04.26
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Problem: Pension Liabilities are Like Snowflakes

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

Solution: Custom Liability Index (CLI)

Pension liabilities (benefit payments) are like snowflakes being quite different and unique for each plan sponsor due to each plan having a different labor force, salaries, mortality, plan amendments, colas, etc. Yet several pension plans use generic bond indexes (i.e. Aggregate, long corporate) as a proxy for their liabilities and as a benchmark for duration matching strategies, and even performance measurement. It is impossible for any generic bond index to replicate a pension plan’s liabilities. This inappropriate use of generic indexes could lead to erroneous duration matching and liability growth rate calculations.

The solution is a Custom Liability Index (CLI) that is based on the actuarial projections of each pension plan. The Ryan team designed the first CLI in 1991, as the proper pension fund benchmark. The CLI is one of the key products for Ryan ALM’s turnkey system. The CLI accurately calculates the term structure, net liabilities, interest rate sensitivity, and growth rate for each of our clients’ liability schedule.

Importantly, assets need to know what they are funding, which is the net liabilities after contributions that should be the first source to fund those liabilities. Unfortunately, actuaries do not calculate net liabilities, nor do they include contributions as future assets in the funded ratio and funded status. Once again, this could lead to improper asset allocation decisions. As a result, the CLI should be the first step in asset allocation, asset management, and performance measurement.

06.04.26
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Milliman: Public Funded Ratios at 87.6%

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

Milliman has provided the latest update for its monthly Public Pension Funding Index (PPFI). As a reminder, the PPFI analyzes data from the nation’s 100 largest public defined benefit plans.

According to Milliman plan funded status improved by $266 billion during April, as aggregate investment returns advanced an estimated 4.7% for the month. This improvement propelled the plans’ collective funded ratio to 87.6% as of April 30, 2026. This proved to be a significant improvement to the 83.7% witnessed at the end of March. It also surpassed the 87% funded ratio achieved as of February 28th. Individual plan returns are estimated to have ranged from 1.6% to 7.7%. That is quite a performance gap for one month.

It is estimated that during April, PPFI’s plan assets increased by $291 billion, topping $6 trillion, while the total pension liability rose modestly, to $6.860 trillion from $6.843 trillion as of March 31. Please remember that pension liabilities under GASB accounting use the ROA as the discount rate. If FASB accounting had been used, liability growth would have been negative for the month and the improvement in the collective funded ratio that much better. However, that is not the case, and as a result, the deficit between estimated plan assets and liabilities narrowed from $1.12 trillion to $851 billion as of April 30th.

“Thanks to April’s rebound, nearly half of the 100 largest public pension plans are now more than 90% funded,” said Ryan Falls, co-author of the Milliman PPFI. However, public pension plans would be wise to try and protect this improved funding, especially given the uncertainty that we currently live under. For the complete report, please click on the link below.

View the Milliman 100 Public Pension Funding Index.

06.02.26
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As Clara Would Ask: “Where’s the Beef?”

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

Clara Peller became famous as a result of her participation in the 1984 Wendy’s ad campaign in which she famously asks, “where’s the beef?”. Her comment was of course in reference to Wendy’s competitors whose burgers were less than impressive in size.

Yesterday, I produced a post highlighting the many benefits of cash flow matching (CFM), including providing ALL the necessary liquidity, creating an extended investing horizon, providing certainty and security, lower management fees, stable contributions/funded ratio, and the elimination of interest rate risk.

Despite the plethora of benefits, we occasionally receive push back from plan sponsors and their advisors on the use of CFM because some folks believe that they can identify a fixed income manager or group of bond managers that will “outperform” a CFM portfolio thus supporting the ROA target, as if that was the primary objective. As we’ve stated many times, the primary objective in managing a defined benefit plan is to SECURE the promised benefits at a reasonable cost and with prudent risk. It is NOT a return objective.

But, let’s just say for argument’s sake that using bonds in your fund was for return purposes. The greatest risk in managing U.S. fixed income is interest rate risk. Yes, most of us grew up in this industry during the last 40+ years when interest rates declined from ridiculous levels (10-year Treasury yield was 15.1% on the day I entered this business (October 1981)) to the zero-rate environment created by Covid-19. Most core fixed income managers continue to use the Barclays Aggregate (formerly Lehman) Index as the benchmark. The YTW on that index is 4.67%. A yield that is certainly below most, if not all, ROA targets for DB pensions (certainly public and multiemployer plans). Moreover, the yield on the Ryan ALM CFM is over 5.00% since it is a portfolio of primarily A/BBB+ corporate bonds. Our CFM should outperform the Agg by the yield difference given the same or similar duration.

Furthermore, that core fixed income manager(s) will actively position exposures related to the types of bonds, including Treasuries, agencies, MBS/ABS/CMOs, corporates, duration, sectors, etc. relative to the index to try to capture some excess return. But is “active management” adding value and what is the annual volatility or standard deviation associated with that activity? Many bond investors benefited from the nearly 4 decade decline in rates, as bond prices rose when yields fell. However, most investors today weren’t around for the 28-years prior to 1981 when U.S. interest rates rose! Things were much different for bond managers then.

Do you know in which direction interest rates will travel during the next 1-, 3-, 5- or more years? We, at Ryan ALM, certainly don’t and we don’t need to know. Given that the greatest risk to an active core bond strategy is rates, why do you remain confident that your manager(s) will consistently meet or exceed the index’s return? With CFM, there is no guessing as to what rates will do. On the day that the CFM portfolio is created, asset cash flows of principal and interest are matched against the liability cash flows of benefits and expenses. As rates move (either up or down), that careful match remains, which is how we can claim that both security and certainty (barring a default) is achieved. Your core manager can’t make that claim because the Aggregate index looks nothing like your unique liabilities.

By the way, the “Agg” is up only 0.17% for the 5-years ending May 31, 2026. On a YTD basis, the index has produced a 0.38% return. Do you think that those results are helping or hurting your fund? As Clara asked 42-years ago (oh, my!), “where’s the beef?” I can tell you. It is found in a CFM strategy and it is a whopper!