11.19.25
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It Couldn’t Be Any Easier!

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

I participated this morning in a portfolio review for one of our Cash Flow Matching (CFM) clients. As usual, it couldn’t be any easier for us and the client. Following the Chair’s announcement that it was Ryan ALM’s turn, I stated that all benefits and expenses remain SECURED on a net of contributions basis through 2048 and gross of contributions through 2056. Any questions? That’s it!

There is no guessing as to the future. There is no hand-wringing or pondering regarding the Fed, and what they might do at their next meeting in December. No worries about equity valuations, the impact of AI, the increase in the use of PIKs in private credit portfolios, etc. We built this portfolio in the third quarter of 2024, and it continues to do exactly what it was designed to do. The combination of maturing principal and interest is providing the necessary asset cash flows to meet monthly distributions (liability cash flows of benefits and expenses) like clock-work. How comforting!

The only potential fly in the ointment is a default of an investment grade bond. But according to S&P, that happens at a 0.18% annual clip or roughly 2 / 1,000 bonds (last 40-years). Fortunately for us and our client this has not happened within their portfolio. So, as long as the monthly cash on hand remains greater than the required distribution, we are meeting the requirements of our mandate.

There is no anxiety associated with our management of pension assets. Only an element of certainty rarely found within pension management. How many of your other managers can provide a summary as concise as ours? How many of your managers have built a strategy where the performance for the length of the mandate (5-, 10-, or more years) is known on the day the portfolio is constructed? When we talk about CFM as a “sleep-well-at-night” strategy, this is precisely what we are talking about. Why wouldn’t you want some of this in your fund?

As a reminder, through CFM the liquidity is enhanced, the benefits (promises) SECURED, the investing horizon extended for the non-CFM assets, and certainty established for that portion of the portfolio. Seems like a no brainer.

11.19.25
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I’m Confused??

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

I’ve had the great pleasure of speaking at a number of conferences and events this year. Thank you to those of you who provided me with these opportunities. Regular readers of this blog know that I’ve been discussing the concept of uncertainty and specifically how human beings really despise this state of being.

In the prior two weeks I’ve spoken at both NCPERS in Fort Lauderdale, FL, and at the IFEBP in Honolulu, HI, where I had the opportunity to discuss Cash Flow Matching (CFM) as part of a broader ALM conversation. In both cases I asked the audience, one primarily public fund sponsors (NCPERS) and the other multiemployer, if they could point to any part of their DB pension plan that brought certainty. Not surprisingly, not one hand was raised.

I then commented that if humans, including plan sponsors of DB pension plans, hated uncertainty, why were they continuing to live with the uncertainty imbedded in their current asset allocation structures? These asset allocations place plan sponsors and the plan’s participants on the performance rollercoaster driven by the whims of the markets, which shouldn’t be comfortable for anyone.

So, I ask once more: if folks hate uncertainty and they have the chance to bring a level of certainty into the management of pension plans through CFM, why haven’t they done so? Do they still believe that managing a pension plan is all about generating the ROA? Do they believe that their plan is sustainable (perpetual), so the swings in funded status don’t matter? Do they not worry about where liquidity is going to be derived despite the significant push into alternatives that are sapping plans of liquidity? These are just a few questions for which answers must be furnished. Without an appropriate answer the practice must stop.

A carefully constructed (optimized) CFM program established with IG bonds will SECURE the promises, enhance and provide the necessary liquidity (chronologically), extend the investing horizon for the non-bond assets that can now just grow, and in the process provide the plan sponsor and their members with a “sleep-well-at-night” strategy that is far more certain than anything that they are currently using. We recognize that change isn’t easy, but it is sure better than riding the proverbial performance rollercoaster with the accompanying unknown climbs and dramatic falls.

11.17.25
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ARPA Update as of November 14, 2025

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

I hope that last week was great for you. I didn’t recognize anyone from the PBGC at the IFEBP in Honolulu last week, but I suspect that there must have been a few attendees. Why? Well, for the first time that I can recall since I began producing these weekly updates, there is nothing to report in terms of the PBGC’s implementation of the ARPA pension legislation. NOTHING!

Now, I’m sure that a lot is going on behind the scenes, especially given the announcement that Janet Dhillon has been confirmed as the 17th Director of the Pension Benefit Guaranty Corporation, but in the weekly update produced as of Friday, November 14th, there were no applications submitted, as the PBGC’s e-Filing portal remains temporarily closed. No pension plans received approval for SFA nor were any denied. There were no withdrawals of previously submitted applications. Lastly, there were no multiemployer plans asking to be added to the growing waitlist.

As we get closer to the legislation’s deadline for new applications to be submitted, we are down to about 6-7 weeks until December 31, 2025. Having a week in which nothing concrete was reported reduces the odds that most of those plans yet to file will actually be given that opportunity.

The graph above reflects the activity through November 7th. Despite the lack of activity last week, the PBGC deserves high praise for their handling of this critical legislation that has helped som many American workers and pensioners. Lastly, at the IFEBP was asked to touch on ARPA/SFA and how best to incorporate ALM strategies to mitigate risk. I’ve had the privilege to speak on this topic numerous times. In summation, the allocation of Special Financial Assistance (SFA) to multiemployer plans is truly of gift. That allocation is not likely to ever be repeated. As such, plans should take every precaution to ensure the maximum coverage of benefits (and expenses) while minimizing the risk through their investments. Call on us (ryanalm.com) if we can help you think through the use of Cash Flow Matching to SECURE those promises.

11.17.25
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The Times They Are A-Changin’

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

Thank you, Bob Dylan, for the lyric that is just perfect for this blog post. I have just returned from the IFEBP conference in Honolulu, HI. What a great conference, and not just because it was in Hawaii (my first time there). If it wasn’t the location, then what made this one so special? For years I would attend this conference and many others in our industry and never hear the word liability mentioned, as in the pension promise, among any of the presentations.

So pleased that during the last few years, as U.S. interest rates have risen and defined benefit pension funding has improved, not only are liabilities being discussed, but more importantly, asset allocation strategies focused on pension liabilities are being presented much more often. During this latest IFEBP conference there were multiple sessions on ALM or asset allocation that touched on paying heed to the pension plan’s liabilities, including:

“Asset Allocation for Today’s Markets”

“My Pension Plan is Well-Funded – Now What?”

“Asset Liability Matching Investment to Manage the Risk of Unfunded Liabilities”

“Decumulation Strategies for Public Employer Defined Contribution Plans” (they highlighted the fact that these strategies should be employed in DB plans, too)

“Applying Asset Liability Management Strategies to Your Investments” (my session delivered twice)

“Entering the Green Zone and Staying There”

These presentations all touched on the importance of risk management strategies, while encouraging pension plan sponsors to stop riding the performance rollercoaster. Given today’s highly uncertain times and equity valuations that appear stretched under almost any metric, these sessions were incredibly timely and necessary. Chasing a performance objective only ensures volatility. That approach doesn’t guarantee success. On the other hand, securing the pension promise through an ALM strategy at a reasonable cost and with prudent risk does redefine the pension objective appropriately.

I know that human beings are reluctant to embrace change, but we despise uncertainty to a far greater extent. Now is the time to bring an element of certainty to the management of pension assets. By the way, that was the title of my recent presentation to public funds at the NCPERS conference in Fort Lauderdale. Again, understanding pension liabilities and managing to them is not new, but it has certainly been under a bigger and brighter spotlight recently. That is great news!

11.11.25
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ARPA Update as of November 7, 2025

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

Aloha from beautiful Waikiki, HI, where the IFEBP annual conference is taking place. I’m so fortunate to be able to speak twice at this amazing event. Fortunately, part of my presentation/session speaks to ARPA and he use of Cash Flow Matching to secure the promised benefits. More on that in a future blog post.

For now, let’s discuss the PBGC’s activity from last week. It was a fairly quiet week, which is a bit surprising given the number of funds that still sit on the PBGC’s waitlist to submit an application seeking SFA. That said, two non-priority group members, including Warehouse Employees Union Local 169 and Employers Joint Pension Plan and the Colorado Cement Masons Pension Trust Fund were permitted to file applications. In the case of the Cement Masons, they withdrew the initial application on 11/4 only to resubmit a revised application on the 7th. Warehouse employees submitted a revised application, too. They are seeking nearly $80 million in SFA for the 3,772 members.

In other ARPA news, there were no applications approved (the last one was 10/16), no pension funds asked to repay a portion of the SFA, and no plans denied for failure to meet the requirements. As mentioned previously, there were two funds that withdrew applications, but the Cement Masons patched up whatever issues were identified.

Lastly, there were no new funds seeking to be added to the waitlist and none of those currently on the waitlist requested to have the valuation date determined. There still remain too many plans seeking SFA with initial applications.

Given the tremendous uncertainty in markets and the economic environment, plan sponsors of DB pensions receiving SFA would be wise to secure as much of their benefits (and expenses) as possible.

11.07.25
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Milliman – Corporate Pension Funded Ratios Up Again

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

Milliman once again released its monthly Milliman 100 Pension Funding Index (PFI), which analyzes the 100 largest U.S. corporate DB pension plans. October marked the seventh straight month that the PFI funded ratio improved, increasing from 106.5% on September 30, to 107.1% as of October 31. Once again it was asset gains that drove this result. Those gains were marginally offset by a 3-basis-point dip in the discount rate, which slipped to 5.33% by the end of October. For the month, the market value of plan assets rose to $1.328 trillion, while the projected benefit obligations rose to $1.240 trillion.

Zorast Wadia, author or the report and my lunch date this past Wednesday, stated “Continued robust investment gains in October pushed corporate pension funded ratios further into surplus territory and up to levels not seen since March 2002, during the dot-com crisis,”. He continued, “however, we’ve seen recent evidence of declining discount rates, and if this continues through the end of 2025, funded ratios may lose ground without prudent asset-liability matching.”

That last statement by Zorast was the main focus of our lunch conversation. We are both thrilled to see the improved funding for private DB pension plans but remain concerned that those plans that haven’t yet de-risked are potentially playing with fire. Furthermore, securing the promised benefits through a cash flow matching strategy, which I believe is the primary objective in management a DB pension plan, gives these private pension plans great flexibility and helps in attracting and retaining talented employees. Yields remain attractive and the potential cost reduction to secure future benefits is still robust.

View this month’s complete Pension Funding Index.

11.07.25
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Dhillon Sworn in as PBGC Director

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

As a follow-up to Tuesday’s PBGC blog post, Janet Dhillon was sworn in as the 17th director of the Pension Benefit Guaranty Corporation on November 3, 2025. “I am privileged to serve as the PBGC’s director and committed to ensuring PBGC achieves operational excellence and transparency,” Dhillon said. “I look forward to leading the agency in its mission to protect the retirement security of millions of American workers, retirees, and beneficiaries whose pensions are insured by PBGC.”

Let’s hope that her commitment includes looking at ways to reduce the cost to insure these plans which is often cited as a reason that many have sought to offload pension liabilities through a pension risk transfer. As I stated in the original post, premium increases didn’t seem warranted for private plans given the massive surplus. Also, there are still more than 100 multiemployer plans going through the ARPA/SFA process. Let’s hope that she is committed to this legislation, too.

PBGC Increases Premium Rates – Why?
11.06.25
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You Don’t Say!

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

Morgan Stanley has published the results from their Taft-Hartley survey, in which they have to provided “insights into how Taft-Hartley plans are managing priorities and navigating challenges to strengthen their plans”. I sincerely appreciate MS’s effort and the output that they published. According to MS, T-H plans have as their top priority (67% of respondents) delivering promised benefits without increasing employer’s contributions. That seems quite appropriate. What doesn’t seem to jive with that statement is the fact that only 29% that improving or maintaining the plan’s funded status was important. Sorry to burst your bubble plan trustees, but you aren’t going to be able to accomplish your top priority without stabilizing the funded status/ratio by getting off the performance rollercoaster.

Interestingly, T-H trustees were concerned about market volatility (84%) and achieving desired investment performance while managing risk (69%). Well, again, traditional asset allocation structures guarantee volatility and NOT success. If you want to deliver promised benefits without increasing contributions, you must adopt a new approach to asset allocation and risk management. Doing the same old, same old won’t work.

I agree that the primary objective in managing a DB plan, T-H, public, or private, is to SECURE the promised benefits at a reasonable cost and with prudent risk. It is not a return game. Adopting a new asset allocation in which the assets are divided among two buckets – liquidity and growth, will ensure that the promises (monthly benefits) are met every month chronologically as far into the future that the assets will cover delivering the promised benefits. However, just adopting this bifurcated asset allocation won’t get you off the rollercoaster of returns and reduce market volatility. One needs to adopt an asset/liability focus in which asset cash flows (bond interest and principal) will be matched against liability cash flows of benefits and expenses.

This approach will significantly reduce the volatility associated with markets as your pension plan’s assets and liabilities will now move in lockstep for that portion of the portfolio. As the funded status improves, you can port more assets from the growth portfolio to the liquidity bucket. It will also buys time for the remaining growth assets to help wade through choppy markets. According to the study, 47% of respondents that had an allocation to alternatives had between 20% and 40%. This allocation clearly impacts the liquidity available to the plan’s sponsor to meet those promises. If allocations remain at these levels, it is imperative to adopt this allocation framework.

Furthermore, given today’s equity valuations and abundant uncertainty surrounding interest rates, inflation, geopolitical risk, etc., having a portion of the pension assets in a risk mitigating strategy is critically important. Thanks, again, to MS for conducting this survey and for bubbling up these concerns.

11.04.25
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PBGC Increases Premium Rates – Why?

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

The demise of the defined benefit (DB) plan, most notably within the private sector, is harming the American worker and significantly reducing the odds of a dignified retirement. The Federal government should be doing everything that it can to protect the remaining pensions, including keeping fees low to ensure that these critically important retirement vehicles continue to operate. But unfortunately that doesn’t seem to be the case in this particular situation.

I have been very impressed with and supportive of the PBGC’s effort implementing the ARPA pension legislation, but I question the need to raise premium rates for 2026, which the PBGC has just announced. Why? As of fiscal year-end 2024, the PBGC’s single employer insurance program had a $54.1 BILLION surplus, as assets totaled $146.1 billion and liabilities stood at $92.0 billion. Despite these significant excess resources, the PBGC is increasing rates for the “flat rate premium per participant” in single-employer plans to $111 per participant in 2026 from $106. This 4.7% increase was described in a Chief Investment Officer article as modest! That increase doesn’t seem modest anyway you look at it, but certainly not when one remembers that $54 billion surplus. What is the justification? The rate per $1,000 in “unvested benefits”, not subject to indexing, was frozen by Congress in Section 349 of the SECURE 2.0 Act of 2022 and therefore remains $52. Seems like we need more legislation to freeze the flat-rate premium.

Despite the significant improvement in the multiemployer pension program due to the Special Financial Assistance (SFA) related to ARPA pension reform, that insurance pool is still underwater. As a result, multiemployer plans that only pay a per-participant premium will see the per-participant rate for flat rate premiums rise to $40 from $39 next year. That amounts to an increase of 2.6%. So, the program that is underwater sees a premium increase of 2.6%, while the insurance pool with the massive surplus gets an outsized 4.7% increase? I guess one must work for the government to understand that decision.

Again, we need to do much more to protect DB pensions for all American workers. Asking untrained individuals to fund, manage, and then disburse a “retirement benefit” with little to no disposable income, low investment knowledge, and no crystal ball to help with longevity considerations is just poor policy doomed to failure. We are the wealthiest country in the world, yet we can’t seem to figure out how to control costs associated with retirement, healthcare, education, childcare, etc. and in the process, we are crippling a majority of American families. It isn’t right!

11.03.25
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ARPA Update as of October 31, 2025

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

I hope that you had the chance to enjoy some beautiful Fall weather and some fun on Halloween. I’m having a tough time believing that we are already 5/6s through 2025.

Regarding ARPA and the PBGC’s implementation of this critical legislation, last week had the PBGC accepting four initial applications. Unfortunately, the e-Filing portal is now temporarily closed with 72 pension funds still waiting to submit their initial application.

In other ARPA news, no applications were approved keeping the SFA recipients at 144 since July 2021. There were also no funds asked to repay a portion of the SFA due to census errors, and it has been nearly 1 1/2 months since the last fund repaid some SFA. Fortunately, none of the systems seeking SFA were denied due to ineligibility. However, Iron Workers-Laborers Pension Plan of Cumberland, Maryland, withdrew its initial application seeking $27.1 million for the 754 plan participants.

In somewhat surprising news, Operating Engineers Local 800 and the Wyoming Contractors Association, Inc. Pension Plan, Local 240 Pension Fund, and International Union of Electrical Local 431 Pension Fund each requested to be added to the waitlist. Local 240 pension Fund also locked-in the SFA measurement date as of July 31, 2025. As I’ve been reporting, not sure how the PBGC will get through the remaining initial applications by the December 21, 2025, deadline.

Despite the Fed’s recent 25 basis point cut in the Fed Funds Rate to 3.75%-4.0%, the long end of the yield curve is seeing rates rise. The 30-year Treasury Bond yield was 4.69%, as of the writing of this post. That is up about 0.2% since the Fed’s latest action. The higher rates provide additional cost savings and coverage for SFA recipients through a cash flow matching (CFM) strategy.