Tag Archives: multiemployer-pensions

09.23.24
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ARPA Update as of September 20, 2024

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

Welcome to Autumn! It has always been my favorite season since I was a young boy. I would often listen to NY Giants football on the radio as I spent Sunday afternoons outside in the crisp fall air while raking leaves or lying in a freshly created pile. Unfortunately, the Giants weren’t very good in the ’60s and ’70s. I guess what goes around comes around.

I knew that this day would come since I publish an update on the weekly activity associated with the ARPA pension legislation. There was no obvious activity by the PBGC last week. In their latest update, the PBGC is not reporting any new applications received (the efiling portal remains temporarily closed), no applications were approved, denied, or withdrawn, no plans repaid a portion of the SFA due to census errors, and finally, no multiemployer plans sought inclusion on the waiting list. Oh, well. Even the PBGC needs a rest once in a while.

Perhaps the PBGC was focused on the Fed’s interest rate policy decision like the rest of us. So, I’ll take advantage of the clean slate and use my weekly update to summarize where we are at this stage of the PBGC’s implementation of the ARPA pension legislation which began in July 2021. To date, 92 multiemployer plans have received Special Financial Assistance totaling $68.0 billion in grants (inclusive of supplemental awards, interest, and FA Loan Repayments). Of the 92 approved applications, 38 (41.3%) were the initial application attempt. There has been only one plan that had its application denied for ineligibility. Bakery Drivers Local 550 and Industry Pension Fund had its initial application denied in January 2023. A subsequent application was withdrawn in July 2023.

There are currently 23 applications before the PBGC. Five of those 23 will have the 120-day review period elapse in October. There is still one Priority Group 1 member that hasn’t filed an application out of the 30 funds identified as Priority Group 1 eligible. In addition, there are currently 18 applications that were withdrawn that have yet to refile. As I’ve previously reported, 14 funds have repaid a portion of the SFA received because of overpayment due to incorrect census data. There may be more to come.

The Waitlist had 115 multiemployer plans at one time. Twenty-one of those plans have received SFA grants, another 21 are presently under review, while five applications were withdrawn and not refiled. That leaves 69 plans that have yet to get PBGC approval to submit the initial application. While last week may have been “quiet” for the PBGC from an external point of view, a tremendous effort has been put forth to get to this point with potentially lots more to go.

07.15.24
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ARPA Update as of July 12, 2024

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

Not only has the weather heated up, but so has the activity at the PBGC as it relates to the implementation of the ARPA pension legislation. During the past week two non-priority group plans submitted applications. In the case of the Carpenters Pension Trust Fund – Detroit & Vicinity, it was a revised application seeking nearly $600 million in Special Financial Assistance (SFA), while the Laborers’ Local No. 265 Pension Plan put forward its initial filing seeking $55.6 million. In total, more than 24,000 plan participants would enjoy a more secure retirement with the approval of these applications.

In other ARPA news, the American Federation of Musicians and Employers’ Pension Plan finally received approval. This fund had multiple filings throughout the process, which began on March 10, 2023 with the initial filing followed by two other applications. The wait was certainly worth it, as they will receive >$1.5 billion to reinforce the pensions of nearly 50,000 eligible participants.

There were no applications denied during the past week, but one fund, the United Food and Commercial Workers Union and Participating Food Industry Employers Tri-State Pension Plan, withdrew its application that had been seeking $638.3 million in SFA for 29+k members. There were no plans that were forced to repay excess SFA assets and no new plans added to the waitlist.

We’ve all heard the phrase with uncertainty comes opportunity, and that may very well be true, but the uncertainty comes with a certain level of risk, too. Given all of the uncertainty in the economic and political spheres at this time, is the opportunity greater than the risk? We would encourage plan sponsors of all plan types to look to reduce some of the risk in their funds, especially given the elevated multiples on which the equity markets are currently trading. The higher US interest rates are providing a unique opportunity not available to us in the past two decades. Secure some of the promises (benefits) by defeasing your liabilities through a cash flow matching strategy. We are happy to discuss this suggestion in far greater detail or you can go to RyanALM.com to read myriad research articles and blog posts on the subject.

07.01.24
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ARPA Update as of June 28, 2024 – A Time to Celebrate!

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

As we complete the first half of 2024 and get ready for the Fourth of July celebrations with family and friends, we believe that it is fitting to celebrate the success to date of the ARPA pension legislation and the PBGC’s implementation that has positively impacted so many Americans. Here are the highlights:

ARPA’s Special Financial Assistance has been awarded to 84 plans to date.

Those 84 pension plans are responsible for >1.2 million American Workers, who now have their promised retirement benefit secured.

The 84 multiemployer plans have received roughly $60.4 billion in SFA to date.

Furthermore, there are roughly another 115-120 pension plans that might be eligible to receive the SFA before the program comes to its end. Just think of all those hard-working Americans who might have lost a significant % of their benefit, if not the whole promise, through no fault of their own. Congratulations, to all involved in creating and implementing this incredible legislation.

Despite all of the success of this program to date, there is much still to be done. During the previous week, the PBGC allowed two pension plans to file applications for SFA grants, including I.B.E.W. Pacific Coast Pension Fund and Midwestern Teamsters Pension Plan, with each submitting its initial application. In total, these two funds are looking for about $91.7 million in SFA proceeds for just under 4,000 plan participants. The PBGC will now have 120 days to act on these requests.

In other ARPA news, the Kansas Construction Trades Open End Pension Trust Fund received approval of its revised application. They will receive $43.1 million for the 8,145 participants in their program. There were no applications denied or withdrawn, and no funds were forced to repay excess SFA grants. Lastly, no new funds have been added to the waitlist.

We wish for you a wonderful Fourth of July holiday. Please remember those that sacrificed so much so that we can celebrate the independence and freedom that we enjoy in this country. Stay safe.