Tag Archives: PBGC

07.22.24
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ARPA Update as of July 19, 2024

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

After a very hectic June, in which the PBGC approved nine applications for SFA, July has seen a replenishing of submitted applications seeking SFA grant money with 9 being filed in the first three weeks of the month. In the last week alone, we had Local 734 Pension Plan, Teamsters Local 210 Affiliated Pension Plan, Pension Plan of the Marine Carpenters Pension Fund, and the Pension Plan of the Automotive Machinists Pension Trust submit applications seeking nearly $411.5 million for the combined 20,111 plan participants.

There is really nothing else of note to those of us on the outside of this process. According to the PBGC’s website, there were no applications for SFA approved or denied in the previous week. No funds were asked to return excess payments, no multiemployer plans were added to the waitlist, and no applications were withdrawn.

There are still 16 funds with Priority Group standing (1-6) that are not currently under review, including 1 Priority Group 1 member that hasn’t filed an initial application, while all the others have withdrawn at least initial applications. In addition, there are still 71 waiting list applicants that have not yet submitted an initial application. Despite the successful implementation of ARPA to date, the PBGC still has a ton of work to do.

07.08.24
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ARPA Update as of July 5, 2024

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

We hope that you had an enjoyable long holiday weekend. We once again provide you with an update on ARPA and the PBGC’s implementation of this key pension legislation. Following a busy June, in which nine multiemployer plans received Special Financial Assistance (SFA) approval for $6.4 billion for roughly 233k participants, the PBGC’s application portal has been reopened and three applications were filed during the past week. PA Local 47 Bricklayers and Allied Craftsmen Pension Plan, Local 111 Pension Plan, and Bricklayers Pension Fund of West Virginia have each filed its initial application seeking SFA. In total, these three smallish plans are requesting $25.7 million for 2,066 participants.

In other developments, there was little obvious activity during the holiday shortened week, as there were no plans receiving approval for SFA, no applications that were denied or withdrawn, and no plans agreed to repay excess SFA grant money. Finally, there were no additional plans added to the waitlist at this time. Currently, 37 non-priority plans, from a list of 114, have seen some action on their application – approved, submitted, or withdrawn.

There remains great uncertainty within the US economy. Is the US labor market weakening? Is inflation truly under control? With the recent fall in Q2’24 GDP growth estimates from 3.1% to 1.5% by the Atlanta Fed (GDPNow model), will the Fed finally have the information that they’ve been seeking to reduce US interest rates? Will these trends begin to weigh on US corporate profits? If so, elevated valuations for US stocks could begin to pressure US stock prices, which seem to have been immune to bad news in the last couple of years. It may be time to rebalance or reduce any exposure to stocks within the SFA bucket and lock in these higher US rates.

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.

06.25.24
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ARPA Update as of June 21, 2024

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

I suspect (can only hope) that you woke up yesterday morning just itching to see what news I was going to share as it related to ARPA and the PBGC’s implementation of that critical legislation. Sorry to have disappointed you. Like most everyone else, my day just got away from me.

However, I do have some exciting news to share which might just make up for the disappointment of having to wait one day to get the weekly update. As we’ve been writing, the PBGC was running up against many application review and determination deadlines this month. As a result, they have announced that five funds had their applications approved for Special Financial Assistance (SFA). Terrific!

The five funds are the Retail, Wholesale and Department Store International Union and Industry Pension Plan, the Bakery and Confectionery Union and Industry International Pension Fund, United Food and Commercial Workers Unions and Employers Midwest Pension Plan, GCIU-Employer Retirement Benefit Plan, and the Pacific Coast Shipyards Pension Plan. These funds represent three Priority Group 6 members and two that came through the non-priority waitlist. In total, they will receive nearly $5.8 billion in SFA for just over 200k in plan participants. The Kansas Construction Trades Open End Pension Trust Fund is the last application that needs action in June. There are four that have July deadlines.

There were no new applications submitted to the PBGC, as the portal remains temporarily closed, no applications denied or withdrawn, and none of the plans that have received SFA were forced to return a portion of the proceeds as a result of overpayment identified through a death audit of the plan’s population.

Fortunately, the US interest rate environment and current economic conditions remain favorable for those potential SFA recipients to SECURE promised benefits far into the future without subjecting the grant proceeds to unnecessary risk associated with a non-cash flow matching assignment. Remember that the sequencing of returns is a critical variable when contemplating an asset allocation framework. If your SFA portfolio suffers significant losses in the early years, you negatively impact the coverage period. We’ll be happy to model your plan’s liabilities for free. Don’t hesitate to reach out to us if we can be a resource for you.

06.17.24
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ARPA Update as of June 14, 2024

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

We hope that you enjoyed a wonderful Father’s Day. I’m blessed to still have my Dad with us (95 years young). In addition, I have two sons and two sons-in-law who are wonderful fathers. It was a terrific day!

Regarding ARPA and the PBGC’s implementation of that critical pension legislation, there was some activity during the previous week. However, the filing portal remains temporarily closed for those plans still seeking relief through the SFA grants. That said, there are still 17 applications that are currently being reviewed with 6 of those nearing the 120 deadline for action. Those six plans are seeking nearly $5.5 billion in SFA. As a result, the rest of June is going to be busy for the PBGC.

The Pension Plan for the Arizona Bricklayers’ Pension Trust Fund received approval for its application. They will receive $10.7 million to protect the pensions for the 666 members of the plan. This non-priority plan received approval on their initial application. In other news, there were no applications either denied or withdrawn. However, the Graphic Communications Conference of the International Brotherhood of Teamsters National Pension Fund joined Central States as the only other plan to repay excess SFA as a result of a death audit. In this case, they are repaying just over $8 million.

Have a great week. Don’t hesitate to reach out to us if you like to learn more about cash flow matching and how it can be used to extend and protect the SFA grant assets so vital to ensuring that the pension promises are met for your participants.

06.10.24
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ARPA Update as of June 7, 2024

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

We are pleased to provide you with another ARPA update. The PBGC approved the applications for two New Jersey funds seeking Special Financial Assistance (SFA). CWA/ITU Negotiated Pension Plan and the Pension Plan of Local 102, both non-priority funds, will receive $545.6 million and $12.5 million, respectively, in order to ensure that their 24,796 participants will receive the promised benefits.

Unfortunately, there isn’t much else to report, as there were no new applications submitted, and the queue remains at 18. There were no applications rejected or withdrawn and no pension systems were added to the waitlist, with 32 of 114 having had some activity (submissions, withdrawals, and approvals) to date. Central States remains the only plan to pay back excess SFA proceeds.

The 18 plans that are currently under review carry some heft, as they are collectively seeking >$13 billion in SFA for nearly 370K participants. Seven of those plans have application “deadlines” in June. As a reminder, the PBGC has 120 days to act on an application once it has been submitted. Fortunately, US interest rates remain elevated providing plan sponsors with the opportunity to use cash flow matching to secure the SFA assets and significantly reduce the risk associated with a traditional asset allocation. Sponsors would be wise to use the legacy assets to assume a more traditional asset allocation since those assets now have the benefit of an extended investing horizon.

We hope that you have a wonderful week.

06.03.24
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ARPA Update as of May 31, 2024

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

Welcome to June and the latest update on the PBGC’s effort to implement the ARPA pension legislation. There isn’t much to report, but I’m happy to mention that two plans received approval of the SFA applications.

Maryland Race Track Employees Pension Plan and the Radio, Television and Recording Arts Pension Plan were granted approval for SFA totaling $89.6 million. Both plans were categorized as non-priority funds. In the case of the Maryland Race Trace Employees, they are galloping toward receiving $26.7 million for the 1,407 plan participants, while the Radio, Television and Recording Arts will no longer have to perform for their benefits as they will get $62.8 million for the plan’s 516 participants or roughly $121 K per participant.

The only other reported activity had the Carpenters Pension Trust Fund – Detroit & Vicinity pulling its application that was seeking $595.5 for more than 22,000 members of the plan. This non-priority plan from Troy, MI, pulled its initial application. There were no new applications filed or rejected. No plans were added to the waitlist and no pension funds returned excess SFA assets.

June looks to be shaping up as a busy month for the PBGC, as there are nine funds that have approval dates this month, including the Bakery and Confectionery Union and Industry International Pension Fund, that is seeking nearly $3.2 billion in SFA. In total, the nine funds are hoping to gather more than $6 billion in grants for 233,845 participants. Six of the nine funds are waiting to get approval from the PBGC on revised applications. Good luck.

05.28.24
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ARPA Update as of May 24, 2024

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

I hope that you enjoyed a long, restful weekend. Our thoughts and prayers are with all of the US service men and women who gave the ultimate sacrifice to enable the rest of us to continue to enjoy our freedom.

With respect to the ARPA legislation and the PBGC’s yeoman effort to implement, there was some activity last week. In fact, there were three plans that filed applications and one that received approval. Local Union No. 226 International Brotherhood of Electrical Workers Open End Pension Trust Fund, Local 1783 I.B.E.W. Pension Plan, and the Pressroom Unions’ Pension Plan each filed its initial application45 last week seeking SFA. The three plans are non-priority group members and in total they have asked for $127.4 million for just over 3,400 plan participants.

Happy to report that the UFCW Regional Pension Fund received approval for its application. The non-priority fund will receive $54.5 million, including interest, for its 4,605 participants. This bring the # of approved applications to 73 and a total of $52.2 million in final SFA amount approved including interest and FA loan repayments. There was no other activity report including applications denied, excess SFA repaid, plans added to the waitlist or plans on the waitlist setting a lock-in date for valuation purposes.

There is the possibility that 128 additional plans may receive SFA before the legislation expires. This total includes those under review, those plans that have withdrawn and not refiled, and finally, those plans on the waitlist that have yet to file the initial application.

05.13.24
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ARPA Update as of May 10, 2024

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

Another Monday brings the weekly update on the PBGC’s effort to implement the pension rescue under ARPA. As noted previously, activity has definitely slowed in recent weeks, and the week ending May 10, 2024 is no exception. I can report that the only activity on the PBGC’s ARPA spreadsheet is a withdrawal of a previously revised application. Employers’ – Warehousemen’s Pension Plan, a non-priority plan out of Los Angeles, was seeking $40 million in Special Financial Assistance (SFA) for just over 1,800 plan participants. The latest version of the application had been filed on March 4, 2024.

Unfortunately, there were no additional applications submitted or approved. At the same time, there were no additional applications withdrawn or denied. Lastly, no plans that might have received excess SFA have returned those excess assets at this tie outside of Central States. There remain 129 plans to still have their applications for SFA reviewed and approved.

Glen Eagle Trading reported the following in a recent email, that In 2023, a survey found that 78% of Americans live paycheck-to-paycheck, up six percentage points from the previous year. Unfortunately, in yet another survey 29% of Americans don’t earn enough to cover basic living costs. The ability to fund a retirement is getting to be more challenging than ever, which is why DB pension systems need to be be protected and preserved. The ARPA pension legislation is going a long way to securing pensions for millions of American workers who were on the verge of losing most, if not everything, that they had earned and counted on for their “golden years”.

05.06.24
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ARPA Update as of May 3, 2024

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

Welcome to May! The PBGC has now been implementing the ARPA legislation since July 2021. Great strides have been made since Local 138 Pension Trust Fund received the first approval for the SFA grant ($112.6 million) on December 21, 2021. The grant proceeds were ultimately awarded on January 14, 2022. There have been another 71 funds to receive approval for their SFA applications ($53.8 billion in SFA) with another 129 currently awaiting action on their applications. Thats a huge effort to-date and a greater one to come.

That said, there must have been a big celebration at the PBGC for Cinco de Mayo this past weekend, as there were no new applications received, denied, approved, withdrawn, or excess proceeds repaid during the previous week. Furthermore, there were no pension systems looking to be added to the waitlist, which currently has 108 systems seeking approval from the original 114 on the list. Of course I’m being facetious about the PBGC’s celebration as they have already accomplished a lot, but there remains a ton to do before the legislation reaches its termination date.

I am attending and speaking at the IFEBP’s legislative conference in Washington DC beginning today, and I hope to gather some intel on anything related to ARPA’s pension reform and future actions. I’ll report back on any interesting tidbits. Have a great week.