01.16.26
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Is A “K” Truly Representative?

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

I recently attended the Opal Public Fund Forum in Arizona. I’ve always appreciated the opportunity to attend and speak at Opal’s pension conferences. This latest version was no exception. However, I found it interesting that there were two thoughts being expressed over and over again. First, many presenters talked about uncertainty. The other idea centered on the current economic environment, which was frequently described as being K-shaped.

Regarding uncertainty, we often write about the onerous impact of uncertainty on individuals, both from a psychological as well as a physiological standpoint. Yet the pension community continues to embrace uncertainty through implementation of traditional asset allocation approaches, which are potentially subject to significant market events. Why? I’m not going to dwell on this topic today as I’d rather focus some attention of the current economic environment, and I’ve covered many times how Ryan ALM can bring certainty, and a sleep-well-at-night approach, to pension management.

As the title above questions, is defining the current economic environment as a K appropriate? When I look at the letter K, it says to me that 50% of something is advancing while another 50% is declining. Is that what is happening in today’s economy? Are 50% of American workers showing strong economic gains, while 50% struggle? I would say, “NO”! No matter what metrics one reviews, indications are that a far greater percentage of the American workforce is struggling to meet basic living needs than a K would suggest. I’m not sure what letter truly represents today’s conditions, but when only 10%-20% of our households are seeing improved conditions that doesn’t conjure up a K in my mind.

The idea of American Exceptionalism is being challenged by today’s economic realities. It is so disappointing given the potential that we possess as a nation. However, our collective wealth continues to be concentrated among a small percentage of American households at the same time that expenses for basic needs – housing, medical coverage, education, childcare, food, insurance, utilities, and retirement – continue to challenge most budgets.

In a recent article by Adam Bonica, titled “The Wall Looks Permanent Until it Falls”, Adam highlights (lowlights perhaps) the significant differences in key metrics relative to a U.S. peer democracy group of 31 developed nations (OECD). For instance, he shows multiple stats in four broad categories, including Economy and Inequality, Family and Livelihood, Survival and Safety, and Institutions and Justice. It is not to say that these peers don’t have these issues – they do. They just experience them at much lower rates. The comparisons that Mr. Bonica focused on were just the averages for the peer group relative to the U.S., and they prove quite stark.

For instance, the peer average for the Top 1% of households by income is 12.8%, while in the U.S. it is 21%! If the Top 1% of earners just took 12.8%, every American household would get an additional $19k/year. If the Top 1% of Household wealth in the U.S. only had 23.2% of the country’s wealth instead of the 30.6% it currently has, every American household would have an additional $96k. A big expenditure every year for American households is healthcare. Our peers average 9.2% of one’s household spending while we average 17.1%. Just matching the rate of spending would reduce our annual expenditure for healthcare by -2.1T/year. Oh, and it isn’t like our “investment” in healthcare is reaping longevity rewards – it isn’t, as we average -4.1 years less than our average peer (78.4 years versus 82.5 years).

We can do a lot better as a society and economy. There are currently 15 million Americans working full-time that earn a level of income that is below the poverty line. Not acceptable. Only about 10% of the American workers are in DB pension plans. As I’ve stated many times, asking untrained individuals to fund, manage, and then disburse a “benefit” without disposable income, no investment acumen, and no crystal ball to help with longevity is just poor policy. Again, we can do better. Ron and I and the Ryan ALM team are focused on protecting and preserving DB pension plans. I wish that we could do more!

01.15.26
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If It’s Good Enough for the Swiss

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

WTW has published the results for their Swiss Pension Index. Swiss funds are performing exceptionally well with the average funded ratio hitting 128.5% at year-end. The improved funding reflects strong asset performance and the impact of rising interest rates which lowered the present value of future liabilities (benefit payments). Despite the good news, WTW warns investors to be cautious “given the currently elevated valuations in global equity markets a market correction could potentially be around the corner, so continued discipline and prudent risk management is required.”

Given the uncertainty that is always present in the management of defined benefit pension plans whether in the United States or abroad, we always recommend a disciplined and prudent risk management approach. Our sentiment isn’t restricted to U.S. markets. “Pension funds should continuously monitor their portfolios as market, interest rate, and geopolitical conditions evolve,” recommends Alexandra Tischendorf, Head of Investment at WTW Switzerland.

Importantly, Ms. Tischendorf shared that “we (WTW) are also seeing increased adoption of cash flow–driven investment (CDI) approaches, particularly for liabilities with fixed payment profiles. These strategies align investment returns more closely with expected cash flows and can enhance portfolio resilience compared to traditional duration-based approaches.” YES!

We’ve often shared through our blogs and research that cash flow matching (CFM) strategies are superior to duration-only implementations, as you get a more precise duration match through CFM, while also getting the liquidity to meet ongoing benefits and expenses. As always, we are happy to provide a free analysis to any pension plan sponsor that wants to understand what is possible through CFM. Don’t be shy!

01.12.26
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ARPA Updated as of January 9, 2026

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

We hope that 2026 has begun well for you.

Last week was very quiet regarding ARPA and the PBGC’s implementation of this critical pension legislation. The PBGC has entered an inflection point, in which initial applications are no longer accepted (by legislation) and only revised applications can be resubmitted as of 1/1/26. There are dozens of multiemployer plans that will not be given an opportunity to submit an application for SFA. It is truly unfortunate.

In fact, a significant percentage (78/84) of the applicants that haven’t been called from the waitlist are plans that only became “eligible” following the Second Circuit’s ruling. As a reminder, multiemployer plans that terminated by mass withdrawal (prior to 2020) and are now seeking Special Financial Assistance (SFA) sit in a very narrow and evolving category. Historically, the PBGC treated them as ineligible, the Second Circuit decision has effectively opened the door for some of these plans to file as eligible multiemployer plans under ARPA, provided they still otherwise meet one of the statutory SFA eligibility tests and file by the regular SFA deadlines. There’s the catch, not one of these “mass withdrawal” plans has been given the opportunity to submit an application prior to the December 31, 2025, deadline.

Regarding non-mass withdrawal applicants, the previous week saw no applications submitted, none approved, no plans being denied due to ineligibility, and no plans asked to rebate a portion of the SFA received due to census issues. However, there was one plan that withdrew its initial application. Teamsters Industrial Employees Pension Plan, a non-priority group member, is seeking $27.4 million in SFA for the 1,888 plan participants. They will have the opportunity to resubmit an application until 12/31/26.

It appears that there are roughly 40 funds, including those currently under review and those that withdrew a previous application, that might still be receiving SFA grants. If that is correct, we might eventually have more than 190 pension systems supported by ARPA/PBGC. Amazing. Unfortunately, it appears that more than 80 will not be given the opportunity to file an application with the PBGC.

01.09.26
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Milliman: Corporate Pension Funding UP – Again!

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

Milliman released its monthly Milliman 100 Pension Funding Index (PFI), which analyzes the 100 largest U.S. corporate pension plans. They reported that the funded ratio has now improved for nine straight months – impressive! As of December 31, 2025, the funded ratio for the index constituents is 108.1%, which is up substantially from year end 2024’s 103.6%.

The increase in the funded ratio for December (and the year) was mostly driven by the performance of the assets for the index’s constituents that saw an 11.32% average return for the year, increasing asset values by $53 billion. A rather stable interest rate environment lead to only a $1 billion decline in the PV of those FV liabilities.

According to Zorast Wadia, author of the Milliman 100 Pension Funding Index report, “discount rates fell during the year, and this trend could extend into 2026, potentially reversing some of the recent funded status gains and underscoring the continued need for prudent asset-liability management.” We couldn’t agree more.

It was the significant decline in U.S. interest rates during a nearly four decade bull market for bonds that really crushed funding for private DB pension plans. It would be tragic to witness a deterioration in the funded ratio/status after reclaiming a strong financial footing. Secure those promises and sit back and enjoy managing surplus assets.

Here is the link to the full December report: View this month’s complete Pension Funding Index

01.09.26
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Ryan ALM, Inc. Q4’25 Newsletter

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

We are pleased to provide the Ryan ALM, Inc. Q4’25 Newsletter that explores both asset and liability performance for both Q4’25 and calendar year 2025. As you will read, asset growth has exceeded liability growth for both public and private pension plans. Funding continues to improve despite the recent fall in U.S. interest rates that increase the present value of pension liabilities.

Please don’t hesitate to reach out to us with any questions that you might have regarding this publication. Also, please call on us if you’d like to explore a cash flow matching (CFM) strategy to learn how you can reduce risk within your current asset allocation. Thank you for your continuing support of Ryan ALM, Inc. and our mission to protect and preserve defined benefit plans.

01.05.26
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ARPA Updated as of January 2, 2026

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

Happy New Year! We, at Ryan ALM, wish for you and yours an incredible 2026. May all your pension liabilities be covered and secured.

The PBGC has updated its ARPA spreadsheet after not updating it for the week of 12/26/25. The January 2, 2026, update highlights one application that was submitted, another that was withdrawn, and five new additions to the waitlist. Let’s get into the detail.

Teamsters Local 277 Pension Fund has submitted a revised application. This non-priority pension plan is seeking $18.3 million for its 1,633 participants. The PBGC has until April 21, 2026, to complete its review. In other ARPA news, Columbus, OH based Bricklayers Local No. 55 Pension Plan withdrew its initial application. They are trying to secure $8.7 million in Special Financial Assistance (SFA) for their 483 members.

In addition, there were no applications approved during the prior two weeks, nor were there any plans denied or asked to repay a portion of the SFA due to census errors. The last plan to repay a portion of the SFA proceeds did so back in September.

However, another five pension funds added their names to the waitlist bringing the total non-priority plans to 193, with more than 80 of those not submitting an application by the legislation’s deadline of December 31, 2025. It will be very interesting to see what happens to those plans at this time. As a reminder, revised applications can be submitted until December 31, 2026.

Again, we wish for you and yours an incredible 2026. Hopefully, the U.S. interest rate environment continues to provide recipients of SFA the opportunity to defease future benefits and expenses at attractive rates lowering the cost to secure those promises.

01.02.26
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Year-end Interest Rate Update

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

Despite FOMC action that reduced the Fed Funds Rate from 4.25%-4.50% to 3.5%-3.75%, the yield on the U.S. 30-year Treasury bond was higher at 12/31/25 (4.85%) than at year-end 2024 (4.79%). The Treasury yield curve became much steeper during the year as the spread between 2-year notes and 30-year bonds grew from 0.54% to 1.37%. Given the steepness in the YC, using a cash flow matching vertical slice for a portion of the pension plan’s liabilities will provide far greater cost reduction than a 100% CFM for a shorter period. Just something to consider as you look to remove some risk from your DB plan’s AA.

Bond Math and A Steepening Yield Curve – Perfect Together!
12.30.25
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Pension Reform or Just Benefit Cuts?

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

According to NIRS, at least 48 U.S. states undertook significant public pension reforms in the years following the global financial crisis (GFC), with virtually every state making some form of change to its public pension retirement systems. I’ve questioned for some time that those “reforms” were nothing more than benefit cuts. When I think of reform, I think of how pension plans are managed, and not what they pay out in promised benefits. However, this wasn’t the case for those 48 states which mostly asked their participants to contribute more, work for more years, and ultimately get less in benefits.

Equable Institute released the second edition of its Retirement Security Report, a comprehensive assessment of the retirement income security provided to U.S. state and local government workers. The report evaluated 1,953 retirement plans across the country to determine how well public employees are being put on a path to secure and adequate retirement income. Unfortunately, the reports findings support my view that pension reforms were nothing more than benefit cuts. Here are a couple of the points:

“Retirement benefit values have declined significantly: The expected lifetime value of retirement benefits for a typical full-career public employee has dropped by more than $140,000 since 2006, primarily due to policy changes after the Great Recession such as higher retirement ages, longer vesting, and reduced COLAs.“

“Only 46.6% of public workers are being served well by their retirement plans.“

Yes, newer plan designs are allowing for greater portability through hybrid and defined contribution plans, but as I’ve discussed in many blog posts, asking untrained individuals to fund, manage, and then disburse a “benefit” without the necessary disposable income, investment acumen, and a crystal ball to help with longevity issues is poor policy. We have an affordability issue in this country and it is being compounded by this push away from DB pensions to DC offerings.

Pension reform needs to be more than just benefit adjustments. We need a rethink regarding how these plans are managed. As we have said on many occasions, the primary objective in managing a pension plan is not one focused on return, which just guarantees volatility in outcomes. Managing a pension plan, public or private, should be about securing the promises that were given to the plan’s participants. That should be accomplished at a reasonable cost and with prudent risk.

Regrettably, most pensions are taking on more risk as they migrate significant assets to alternatives. In the process they have reduced liquidity to meet benefits and dramatically increased costs with no promise of actually meeting return projections. Furthermore, many of the alternative assets have become overcrowded trades that ultimately drive down future returns. Higher fees and lower returns – not a great formula for success.

It is time to get off the performance rollercoaster. Sure, recent returns have been quite good (for public markets), but as we’ve witnessed many times in the past, markets don’t always cooperate and when they don’t, years of good performance can evaporate very quickly. Changing one’s approach to managing a pension plan doesn’t have to be revolutionary. In fact, it is quite simple. All one needs to do is bifurcate the plan’s assets into two buckets – liquidity and growth – as opposed to having 100% of the assets focused on the ROA. Your plan likely has a healthy exposure to core fixed income that comes with great interest rate risk. Use that exposure to fill your liquidity bucket and convert those assets from an active strategy to a cash flow matching (CFM) portfolio focused on your fund’s unique liabilities.

Once that simple task has been done, you will now have SECURED a portion of your plan’s promises (benefits) chronologically from next month as far into the future as that allocation will take you. In the process the growth assets now have a longer investing horizon that should enhance the probability of achieving the desired outcome. Contribution expenses and the funded status will become more stable. As your plan’s funded status improves, allocate more of the growth assets to the liquidity bucket further stabilizing and securing the benefits.

This modest change will get your fund off that rollercoaster of returns. The primary objective of securing benefits at a reasonable cost and with prudent risk will become a reality and true pension reform will be realized.

12.29.25
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A Time to Look Back

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

Nearly eight years ago (2/28/18), I produced a blog post titled, “Let’s Just Cut Them Off!”, in which I took offense to an article trashing pension legislation then referred to as the “Butch Lewis Act” (BLA). The writer of the article, Rachel Greszler, The Heritage Foundation, stated that the BLA (as well as other potential solutions at that time) were nothing more than tax-payer bailouts.  She estimated that these bailouts could amount to as much as $1 trillion. I stated at that time that “I don’t know where she has gotten this figure, but it is not close to reality.”

Ms. Greszler defined the potential recipients of these loans (now grants) as the entire universe of multi-employer plans totaling roughly 1,375 (at that time) with an unfunded liability of $500 billion.  However, the Butch Lewis Act, and subsequently ARPA) was only designed for those plans that were designated as “Critical and Declining”.  The total amount of underfunding for that cohort was roughly $70 billion.  A far cry from the $1 trillion that she highlighted above.

So, where are we today? I’m happy to report that as of 12/19/25, the PBGC has approved Special Financial Assistance to 151 pension plans totaling $75.2 billion. These grants are ensuring that 1,873,112 American workers will receive the retirement benefits they were promised! Amazing!

In my original post, I wrote “given the author’s concern for the million or so union workers whose benefits may be trashed, she certainly doesn’t propose any solutions other than to say that a “bailout” is a horrible way to go.  If these plans don’t receive assistance, they are likely to fail, placing a greater burden on the Pension Benefit Guaranty Corporation (PBGC), which is already financially troubled.” Fortunately, through the ARPA pension legislation, the PBGC’s multiemployer insurance fund is stronger today than it has been in decades.

I finished my post with the following thoughts: “Retirement benefits stimulate economic activity, and usually on the local level. The loss of retirement benefits will have a direct impact on these economies. Also, these benefits are taxed, which helps pay for a portion of the loans (now grants). Doing nothing is not an answer. I applaud the effort of those individuals who are driving the Butch Lewis Act. I encourage everyone to reach out to your legislatures to educate them on the BLA and to gain their support. There are millions of Americans who need your support.  Thank you!”

I was thrilled to work with Ron Ryan and the BLA team headed by John Murphy and David Blitzstein. It remains one of the highlights of my 44-year career. Who knew when I began working with Ron and that team it would lead me to eventually join Ryan ALM, Inc. We continue to fight to protect and preserve DB pensions for the masses. There is a ton of work remaining to do. Securing those promises through cash flow matching (CFM) is an important first step. Let us help you accomplish that objective.

12.29.25
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ARPA Update as of December 26, 2025

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

I hope that you and your families are enjoying a wonderful holiday season. It appears that our friends at the PBGC are in full celebration mode as the weekly update has yet to be posted to their website (PBGC.gov). I know that they remain incredibly busy given the roughly 124 plans that are either in the process of having applications reviewed or still waiting to submit an application seeking Special Financial Assistance (SFA).

I’ll provide an update when one becomes available. In the meantime, I hope that we all have a joyful, healthy, and prosperous New Year in 2026.