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

Football season has begun in earnest, so you can’t blame the PBGC if their activity level was not quite up to the pace that they’d been operating under. For the week ending September 8, the PBGC did not accept any new applications from the waiting list nor did they approve or deny any applications under review. In fact, there wasn’t any activity except that which took place behind the scenes, as there are currently 22 SFA applications in the review queue, as highlighted in the chart below.

There remain more than 100 applications that need to be reviewed and acted on by the PBGC, so their workload will keep them busy for some time to come. As reflected above, 63 funds have or will soon receive Special Financial Assistance. The total grant money received to date exceeds $53 billion. As a reminder, the proceeds from this legislation are to be used to secure benefits and expenses as far into the future as the grant will permit. With US interest rates continuing to rise, a cash flow matching strategy is able to secure more months. Pension plans should be focused on extending the coverage period as far as possible. Using a portion of the 33% of the SFA grant to attempt to increase the allocation is a risky strategy with very little upside potential.