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

We, at Ryan ALM, Inc., wish for you a happy, healthy, and prosperous New Year in 2025. May the markets continue to treat you well. However, nothing grows to the heavens, so it may be wise to alter one’s asset allocation and reduce risk as the year begins given inflated valuations, particularly for large cap US equities.

Regarding ARPA and the PBGC’s on-going effort implementing this critical legislation, there was a pause in activity during the last week. Good for them, as 2024 has been an incredibly busy and successful year. Regarding last week, the PBGC’s eFiling portal remains temporarily closed, so there were no new applications filed. There also weren’t any applications denied, withdrawn, or approved. Finally, there were no repayments made by funds that had received excess SFA.

To recap 2024, the PBGC approved 36 applications, awarding more than $16.2 billion in SFA grants that went to support the promised benefits for 458,446 plan participants. WOW! As the chart below highlights, only 15 of the 87 Priority Group members have yet to have the applications for SFA approved. Three of those applications are currently under review. Of the 115 funds seeking support that weren’t initially identified as a Priority Group member, 64 pension plans have participated to some extent in this program with 33 of those applications approved.

US Treasury note and bond yields (longer maturities) have risen sharply in the last few months. They are at levels not witnessed since early this year. As a result, they are providing plan sponsors with a wonderful opportunity to reduce risk without giving up potentially higher returns. We’d be happy to provide a free analysis on what could be achieved within your plan. Don’t hesitate to reach out to us.

Again, Happy New Year!