ARPA Update Through August 5, 2022

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

I look forward to these Monday updates but would prefer a bit more activity to get everyone excited by the progress being realized in the quest to secure the pension promises that are so important for our American workers. However, I can only report on what is actually happening at this time. That said, we had Local 966 Pension Plan file a revised application seeking Special Financial Assistance of $51.3 million for its 2,356 plan participants. The initial application was filed on March 31, 2022 and withdrawn for unknown reasons on July 15th. The PBGC now has 120 days to act on this revised application.

In other news, the PBGC announced last Monday, August 1st, that the Pension Plan of the Printers League – Graphic Communications International Union Local 119B, New York Pension Fund had its application approved for $90.6 million in SFA proceeds that will go a long way in securing the promised benefits for 1,213 plan participants.

We, at Ryan ALM, are working with a few pension plans that have or will receive SFA proceeds. We are still waiting to see how these plans and their consultants will react to the PBGC’s Final, Final Rules that permit the expansion of permissible investments. We still favor only using SFA proceeds to invest in bonds that would be used to defease the promised benefits (and expenses) chronologically from the next month’s benefits as far out as possible. I’ve modeled many scenarios using historic data and possible future returns with the newly expanded investments. I will be reporting in a separate post on those results, but I haven’t been motivated to change my opinion on how the SFA should be invested. More to come!

2 thoughts on “ARPA Update Through August 5, 2022

  1. I wonder how many funds are left to apply?

  2. good question, Ray! I’ve seen estimates of possibly as many as 200 plans eventually filing an application. 41 have applied with 29 approved so far. That would indicate to me that we are only 20% through this process. When Ron and I were first involved with the BLA, Cheiron was producing data for 114 funds.

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