By: Russ Kamp, CEO, Ryan ALM, Inc.

I hope that you continue to enjoy a terrific Summer.

Regarding ARPA and the PBGC’s effort to implement this critical legislation, last week was rather tame in terms of obvious activity. There were a couple of applications submitted and that’s about it. According to the PBGC’s website, the e-Filing portal is now temporarily closed, as they work through 27 applications that are in various stages of review.

Squeezing through that narrow portal window were Teamsters Local 210 Affiliated Pension Plan and Local Union 1710 I.B.E.W. Pension Trust Fund. Local 210, a non-priority group member, submitted a revised application seeking SFA support of $129.2 million for their 7,588 plan participants, while Local 1710 submitted an initial application looking to support its 1,930 members with a potential SFA grant of just $4.7 million.

As a result of this little activity, we can report that there were no applications approved, denied, or withdrawn. There were also no multiemployer plans added to the waitlist and none of those currently on the list decided to lock-in the valuation date. Based on the information in the chart below, the PBGC has a ton of work left to be done, with roughly 118 pension plans still to be reviewed and hopefully approved for SFA assistance.

While equity markets remain frothy and US interest rates remain at a lofty level relative to recent history, defeasing promised benefits through a cash flow matching (CFM) strategy remains the most prudent approach to securing those benefits with certainty. As we’ve stated in the past, the SFA received is a gift that won’t be replicated. The sequencing of returns is so critical. If your SFA grant gets whacked through market action early in the process, the potential coverage period will be adversely impacted. There is no reason to take that risk.