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

In case you were entirely focused on the PBGC’s implementation of the ARPA legislation, the Kansas City Chiefs won Super Bowl 58 last night in a thrilling overtime win 25-22. What did you think of the new OT rules? Personally, I think that they are here to stay. Good job NFL.

In more series news, the PBGC is still implementing the ARPA legislation despite the application portal being temporarily closed. There is a bit of news to report. One application was submitted on February 8th. CWA/ITU Negotiated Pension Plan, Mount Laurel, NJ, a non-priority group member, submitted a revised application seeking $516 million in SFA for 24,288 plan participants. While that was occurring, two funds – United Food and Commercial Workers Unions and Employers Pension Plan and the Kansas Construction Trades Open End Pension Trust Fund – both non-priority group members withdrew their initial applications. In total, they were seeking $115.4 million for roughly 23,500 participants.

There is still much to be done to get through the roughly 200 plans that are seeking financial assistance under this legislation. US interest rates have continued to rise since the beginning of 2024 given Chairman Powell’s cautionary comments about expecting the Fed to move soon on potential rate cuts. However, there is good news to report as the rise in rates is providing plan sponsors with additional cost cutting opportunities for those that elect to SECURE the promised benefits through a cash flow matching strategy. As a reminder, the rise in US interest rates reduces the present value of those future promises given the higher discount rate.