ARPA Update as of March 3, 2023

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

We are pleased to provide our weekly update on the implementation of the ARPA legislation. The week ending March 3rd had plenty of activity, as there were 6 applications filed, including a supplemental application by Bricklayers and Allied Craftsmen Local 7 Pension Plan seeking an additional $9 million for its 397 participants. The Bindery Industry Employers GCC/IBT Pension Plan, a Priority Group 1 plan, finally joined the party. Not sure what the wait was all about, but this entity has 686 members that were probably wondering if they’d ever see this day, given that Priority Group 1 plans were first eligible to file on July 9, 2021. This pension system is seeking nearly $19 million in Special Financial Assistance. The remaining four plans are each a Priority 6 member. In total, these four plans are requesting $6.8 billion for their 270,000+ participants.

Fortunately, there were no applications denied, but there also weren’t any that were approved either. The PBGC is currently reviewing 26 applications. With the filing of the Priority Group 1 application, the PBGC is only expecting another two plans from that category to potentially file. There was one application withdrawn last week. The Pension Plan of the Moving Picture Machine Operators Union Local 306 withdrew its initial application. This Priority Group 5 plan is seeking $22.5 million in SFA for its 542 participants.

The ARPA program is an incredible lifeline for these once-struggling pension systems. As we’ve articulated on many occasions, this grant is a gift that is likely a once-in-a-generation award. The proceeds, which are a precious resource, need to be invested with great prudence, especially given all of the uncertainty in today’s markets.

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