06.25.26
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The Ryan ALM, Inc. Blog

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

Are you a recent subscriber (thank you) to the Ryan ALM, Inc. blog? Here’s a little history. I began writing this blog in 2013. I’ll never forget my elementary school friend, Tony, who helped me set up the blog, saying that I shouldn’t start one if I wasn’t going to be consistent in producing content. Well, 13-years later and there are now 1,800+ mostly pension-related posts and more than 600k words. When I joined Ryan ALM, Inc. in the summer of 2019, I was extremely grateful to Ron Ryan for supporting this effort and that support continues to this day, while also being a contributor of important content.

As a new subscriber, what should you expect to read among the plethora of posts? I believe the dominant themes are:

  1. DB Pensions exist to secure promised benefits, not maximize returns.
  2. Pension Liabilities should drive investment decisions and not the ROA.
  3. Funded status matters much more than asset returns.
  4. Cash Flow Matching (CFM) is the most prudent way to secure benefits.
  5. Custom Liability Indexes (CLI) are essential for measuring pension success – good governance.
  6. Reducing uncertainty through fully funding benefits is the true definition of pension risk management.
  7. Defined benefit plans should be protected and preserved.

As a reminder, Ryan ALM, Inc. is an independent pension risk management and SEC registered investment firm that helps defined benefit plans improve funded status, reduce liability risk, enhance liquidity, and secure retirement promises through custom liability measurement, cash flow matching, actuarially informed investment strategies, and ongoing monitoring.

Don’t hesitate to reach out to us with your questions and/or comments. They are always welcome on this blog, which can be found here.

06.23.26
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Source Ryan ALM, Inc.

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

At Ryan ALM, Inc., we pride ourselves on being a resource for our clients beyond providing our three products – Cash Flow Matching (CFM), Custom Liability Index (CLI), and our ASC 715 Discount Rates. As regular readers of this blog will recall, we are always highlighting our willingness to provide a free analysis on how any of our products can be used to support your pension fund or E&F, especially if the goal is to secure the promised monthly benefits or grant payments.

These insights have been put to practical use three times in the last week by our clients. In the first case, we were asked to price a possible extension of an existing CFM portfolio by 6-months and 12-months using only investment grade bonds in one case while including high yield in the second scenario.

In the second example, we manage a CFM portfolio for a plan where we have defeased 100% of the net liabilities out to 2056. This plan is scheduled to make contributions until 2048. We were asked to evaluate the impact on the CFM portfolio (and the pension fund) using two new contribution rates equal to 75% and 50% of the current annual payment.

In the third example, we currently manage a significant portion of an E&F’s total fund. They inquired as to what the impact would be on the current CFM portfolio if they expedited grant payments during the next four years. We currently cover future grant payments out to 2036.

In each of these cases, we produced an analysis that will help them come to a decision that is in the best interest of the fund. We encourage our clients, and those that would like to be, to use our services to think through critical issues, such as ongoing liquidity needs, which has become a challenge for many plans/funds as alternative assets have become a bigger share of the asset allocation. Please don’t hesitate to SOURCE Ryan. We suspect that you’ll be quite pleased by what our services can do for you, your fund, and most importantly, your beneficiaries. Try us. I’m certain that you’ll like us!

The Ryan ALM mission is to solve liability driven problems through low-cost, low-risk solutions.

06.22.26
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ARPA Update as of June 18, 2026

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

I hope that all the Dads who may stumble onto this post had a wonderful Father’s Day.

Welcome to the latest update on the ARPA pension legislation. Following a couple of weeks without obvious activity, the PBGC received one revised application from Local 1814 Riggers Pension Plan. This Staten Island, NY-based ILA fund is requesting $2.5 million in Special Financial Assistance (SFA) for its 65 members. The PBGC now has until October 10, 2026 to act on the application or they will automatically receive the SFA proceeds plus interest.

There is no other activity to report outside of this one fund resubmitting its application, as no current applications in front of the PBGC have been approved nor denied. No applications withdrawn and no new funds added to the waitlist. There are currently nine revised applications before the PBGC. There remain >25 applications that have been withdrawn that will likely be resubmitted prior to year-end.

I’m still waiting to learn the fate of the 80 pension funds residing on the waitlist that are Mass Withdrawal casualties prior to 2020. Will they be given the opportunity to file an application or will further legal activity deem them unworthy candidates? In any case, this legislation has been a huge success for American workers promised a benefit that may not have been received. To date, 2,017,527 participants have received $77.9 billion in SFA to support those promises. Yes!

06.17.26
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Just Another Value Stock???

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

Sometimes you just have to laugh at the insanity in our industry. After publishing the post below today, I saw an article that said that Schwab has added a small allocation (0.012%) of SpaceX (SPCX) to their U.S. Large-Cap Value ETF. Now, I realize that SPCX is trying to capture our collective imaginations about space, but there is no way that a Value fund can justify these other worldly valuations. So much for style purity.

Just Another Meme Stock?
06.17.26
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Pension Problem: Gross versus Net Liabilities

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

Most pension plans are focused on gross liabilities as expressed by the funded ratio (total assets / total liabilities) and funded status (total assets – total liabilities). But the truth is plan assets are to fund NET liabilities after contributions. Contributions can be quite large especially for public pension funds. Pension assets need to know what they are funding… answer = NET liabilities. Unfortunately, actuaries do not calculate NET liabilities, nor do they include contributions as an asset to calculate the funded ratio / status. These oversights have an impact on asset allocation, especially if it is focused on the true economic funded status of solvency. The Ryan team created the first Custom Liability Index (CLI) in 1991 that has become a core product of Ryan ALM. Our CLI will calculate NET liabilities as a term structure, so assets and the plan sponsor know the liquidity needed and when to fund NET liabilities. 

GASB accounting requires a test of solvency (asset exhaustion test or AET) for public funds (which should be a requirement for all types of pensions) that includes contributions as a future asset to help fund the future liability cash flow schedule. Assets are grown at the return on asset assumption (ROA) to see if they can fully fund projected benefits – projected contributions (net liabilities). At the point that assets are exhausted, GASB requires a bifurcated discount rate using AA 20-year municipal rates. Ryan ALM modifies the GASB AET to calculate the ROA needed to fully fund net liabilities. We find that our calculated ROA is usually much lower than the ROA assumption currently being used. Our calculated ROA should be the hurdle rate for asset allocation instead of the common practice of choosing an ROA based on an asset only forecast of returns by asset classes. Our modified AET should be the first step in asset allocation after the CLI is built.

Bonds are the only asset class with the certainty of cash flows. That is why bonds have always been used to defease and immunize liabilities. Our Liability Beta Portfolio™ (LBP) is a cost optimization model that will fully fund NET liabilities at the lowest cost to the plan sponsor. We strongly believe that the bond allocation should be used to fully fund NET liabilities chronologically. In the process, an extended investment horizon is created buying time for the Alpha assets to grow unencumbered. We have found that converting the plan’s core fixed income allocation to a cash flow matching portfolio will normally cover the plan’s next 10+-years of benefit payments. Instead, some pension plans use a “Cash Sweep” to fund current liabilities which significantly damages the total return produced by those growth assets. Let bonds fund NET liabilities with certainty through our LBP… and sleep well at night.        

“Where is the knowledge we have lost in information?” T.S. Eliot

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.