ARPA Update as of April 8, 2022

By: Russ Kamp, Managing Director, Ryan ALM, Inc.

The PBGC has provided its most recent update on the filing of SFA applications and approvals. Since August 2021, 36 multiemployer pension plans have filed for Special Financial Assistance (SFA) under ARPA. To date, 10 plans have received approval from the PBGC totaling $2.04 billion of which $1.1 billion has been paid. All of the pension plans that have filed their applications have been in either Priority Group 1 or Priority Group 2. Priority Group 3 plans (those >350,000 participants) were eligible to begin filing as of April 1st. Fortunately, none of the plans that have filed applications have had their potential award rejected.

Given the estimated $95 billion in potential cost assigned to this legislation, there is much activity remaining, as only 2.1% of the estimated cost of the legislation has been awarded to date. Recent 2022 market performance for assets may help plans that have yet to file. A lower starting asset base will enhance the potential grant award. Lastly, we are still awaiting word from the PBGC on their Final, Final Rules. It has been nearly 9 months since the PBGC announced its Interim Final Rules.

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