Monthly Archives: August 2025

08.12.25
by

Corporate Pension Funding – UP!

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

I was out of the office last week, and as a result I am trying to play catch-up on some of the stories that I think you’d be interested in. Happy to report that Milliman released its monthly Milliman 100 Pension Funding Index (PFI), which, as you know, analyzes the 100 largest U.S. corporate pension plans. Importantly, the news continues to be good for corporate pension funding.

For July, a discount rate increase of 3 bps helped stabilize corporate pension funding, lowering the Milliman PFI projected benefit obligation (PBO) by $6 billion to $1.213 trillion as of July 31. Anticipated investment returns were marginally subpar at 0.38%. After taking into consideration a higher discount rate, marginal investment gains, and net outflows, overall corporate pension funding increased by $4 billion for the month.

The Milliman 100 PFI funded ratio now stands at 105.3% up from June’s 105.7%. For the last 12-months, the funded ratio has improved by 2.8%, as the collective funded status position improved by $32 billion. “July marks four straight months of funding improvement, with levels not seen since late 2007, before the global financial crisis,” said Zorast Wadia, author of the PFI. “In order to preserve funded status gains, plan sponsors should be thinking about asset-liability management strategies to help mitigate potential discount rate declines in the future.” We couldn’t agree more with you, Zorast!

As highlighted below, overall corporate pension funding has improved dramatically. A significant contributor to this improvement has been the rise in U.S. interest rates which significantly lowered the present value of those future benefits. Let’s hope that the current funding will encourage plan sponsors to maintain their DB pension plans for the foreseeable future. You have to love pension earnings as opposed to pension expense!

Figure 1: Milliman 100 Pension Funding Index — Pension surplus/deficit

View the complete Pension Funding Index.

08.12.25
by

ARPA Update as of August 8, 2025

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.

08.04.25
by

ARPA Update as of August 1, 2025

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

Talk about jumping out of the frying pan into the fire! I left New Jersey’s wonderful heat and humidity only to find myself in El Paso, TX, where the high temperature is testing the limits of a normal thermometer. Happy to be speaking at the TexPERS conference this week, but perhaps they can do an offsite in Bermuda the next time.

Regarding the ARPA legislation and the PBGC’s implementation of this critical pension program, we continue to see the PBGC ramp up its activity level. This past week witnessed five multiemployer plans submitting applications of which four were initial filings and the fifth was a revised offering. Another plan received approval, while one fund added its name to the waitlist. Finally, two funds have locked-in the measurement dates (valuation purposes).

Now the specifics: The four funds submitting initial applications were Colorado Cement Masons Pension Trust Fund, Iron Workers-Laborers Pension Plan of Cumberland, Maryland, Cumberland, Maryland Teamsters Construction and Miscellaneous Pension Plan, and Exhibition Employees Local 829 Pension Fund that collectively seek $50.8 million in SFA for their 1,260 plan participants. This week’s big fish, UFCW – Northern California Employers Joint Pension Plan, a Priority Group 6 member, is seeking $2.3 billion for its 138.5k members.

The plan receiving approval of its application for SFA is Laborers’ Local No. 130 Pension Fund, which will receive $33.3 million in SFA and interest for its 641 participants. In an interesting twist, Laborers’ Local No. 130 Pension Fund, has added the fund to a growing list of waitlist candidates. If the Laborers name seems to resemble the name of the recipient of the latest SFA grant you wouldn’t be wrong. I was as confused as you are/were until I realized that these entities have different that there are two different EIN #s.

Happy to report that there were no applications withdrawn, none denied, and no SFA recipients were asked to return a portion of the proceeds due to incorrect census information. However, there are still 119 funds going through the process. There is a tremendous amount of work left to be done at this time. This comes on the heels of 131 funds being approved for a total of $73.4 billion in SFA and interest supporting the retirements for 1.77 million American workers/retirees. What an incredible accomplishment!