Tag Archives: politics

08.21.26
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When is $2T Really Not $2T?

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

In 2021, the U.S. ran a deficit of $2.772 trillion. We know that much of the stimulus created by that deficit spending was in reaction to the economic disruption created by Covid-19. Fast forward 5-years, and the 2026 fiscal year (10/1/25-9/30/26) federal deficit is projected to be around $1.9 trillion. That is potentially a lot of stimulus provided to the private sector through the U.S.’s deficit spending. But is this nearly $2 trillion in “stimulus” really creating $2 trillion in demand for goods and services and will it create similar consequences to what we witnessed in 2022 when inflation spiked? I don’t think so.

First, 2021’s stimulus was also accompanied by supply factors, as the economy was effectively “shut down” compounding inflationary pressures. In addition, the 2021 deficit included “only” $352 billion in interest expense associated with financing our national debt (now >$40 trillion).

The primary differences between 2021’s deficit and 2026’s are the facts that supply factors are not present as the economy is able to meet current demand with far fewer impediments and >50% of the deficit now pays for the interest expense on that $40 trillion national debt. Instead of going to individuals in the private sector that might use that $1 trillion in interest expense to demand goods and services, most of that interest expense is going to pension funds, insurance companies, banks, the Fed, foreigners, wealthy people. etc. According to my former INVESCO colleague, Charles DuBois, “only about 10-20% of the interest received is spent into the current domestic economy.”   

Consequently, today’s roughly $2 trillion deficit is much less stimulative than the $2 trillion deficits from 5-years ago. Chuck estimates that it is “perhaps about $0.6 trillion less stimulative”.  Inflation remains an issue, and may worsen should oil shocks materialize during the next several months, but it is not as bad as it could be if we were truly running a $2 trillion annual deficit with most of those $s flowing into the bank accounts of individuals, who like to spend!

08.17.26
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ARPA Update as of August 14, 2026

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

This post is being produced on my flight to Chicago, where I will be speaking at the NCPERS conference on Wednesday. Importantly, I will once again be talking about cash flow matching (CFM), but in the context of a successful implementation of the strategy for a defined benefit pension plan. As many recipients of the Special Financial Assistance (SFA) have found, CFM SECURES the promised benefits, while providing the necessary monthly liquidity to meet ongoing benefits (and expenses) chronologically. I hope that you have a great week.

This past week saw revised applications submitted by Building Trades Pension Fund of Western Pennsylvania and Iron Workers’ Pension Trust Fund for Colorado. They are seeking a combined $55.7 million in SFA for their 5,573 participants.

Non-priority group member, Building Trades Pension Fund of Western Pennsylvania, withdrew its revised application. They’d been seeking $39.7 million in SFA for the 3,907 members of their plan.

Happy to report that there were no pension funds denied the opportunity to file an SFA application and none required to refund a portion of the SFA due to census errors. I think that it is safe to assume that we’ve seen the last of the census problems that plagued initial application filers.

You may recall that I mentioned Retirement Plan of Local 1102 Retirement Fund as being the first of the “Mass Withdrawal” plans to be allowed to submit an application. I now have a better understanding of the likely direction that the PBGC will be taking thanks to Rich Hudson, First Actuarial. According to Rich, the PBGC will only allow multiemployer plans located in the Second Circuit (VT, CT, and NY) to submit applications since it was the Second Circuit that ruled that the Plans Terminated by Mass Withdrawal before 2020 Plan Year were eligible to seek SFA provided that met the other requirements. It appears that plans located in the other Circuits – there are 13 U.S. federal Courts of Appeal, including the D.C. Circuit and the Federal Circuit – will not get the opportunity to file before the ARPA legislation concludes at the end of 2026. I’m sure that there will be more on this issue to discuss.

08.04.26
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Really, WSJ?

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

The WSJ’s editorial board recently published an article based on a new report from Equable Institute highlighting AI’s positive contribution to public pension plans (public workers) and the taxpayers that fund the pensions. This assessment is based on the fact that the AI “market boom” specifically and NASDAQ’s performance generally have continued to generate outsized returns despite so much global uncertainty.

The market’s strong performance has boosted the funded ratios of government pension funds, which Equable estimates hit 85% nationwide this year—the highest level since 2007. Equable estimates that roughly 8% to 10% of government pension funds are benefiting from their investments in about 50 publicly traded AI-related companies. Their analysis doesn’t include investments in privately managed funds that own stakes in private AI companies like OpenAI and Anthropic. 

Equable highlighted the fact that while AI is yielding positive returns for pension funds, the magnitude of the outperformance also bears a warning. They claim that nearly 32% of every $ going into a pension plan is paid by the employers (aka taxpayer), and that should the AI bubble burst, it could lead to significantly higher taxpayer contributions. The WSJ stated that some AI company valuations may be stretched in the current boom and could be in for a correction. They also mentioned that government policies that seek to slow AI including robot taxes and data-center moratoriums—could stifle the boom. 

If that correction becomes reality, taxpayers would be stuck paying much bigger pension bills, which could force worker layoffs as happened after the 2008-09 Great Financial Crisis. They claim that it would be better for governments to move workers to 401(k)-style plans that reduce the risk for taxpayers and give public workers a direct stake in the success of AI and other companies. 

So let me get this straight: the WSJ editorial board is concerned that a potential AI correction might just happen because of stretched valuations leading to greater taxpayer funded contributions, so to minimize that potential risk, it would be better to shutter public pension plans and force public sector workers into DC-like programs. If they are concerned that valuations are stretched perhaps leading to a correction, why would they want public workers to have a direct stake in the “success” of AI and other companies?

I’m sorry, have the folks at the Journal not seen the median account balances for those in DC-styled plans? Do they understand that asking workers – public or private – to fund, manage, and then disburse a “retirement” benefit with little disposable income, no investment acumen, and no crystal ball to help with longevity issues is just silly? Do they not also realize that the public sector workers (roughly 20 million) pay taxes, too. They also buy things which leads to economic activity and job growth. Do we really want our Senior population sitting on the economic sidelines because they can no longer afford to participate? We’ve already messed up retirement for a good portion of the private sector. Enough is enough!

07.26.26
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ARPA Update as of July 24, 2026

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

I hope that you are enjoying a wonderful summer weekend. I’m currently writing this post from an Amtrak train on my way to the Opal Public Fund Forum in Newport, RI. What a beautiful day for a train ride.

There is some very exciting news to report in this week’s update following several ho hum weeks with little to disclose. I’m pleased to report that a “Plan Terminated by Mass Withdrawal before 2020 Plan Year” has been invited to submit an application seeking Special Financial Assistance (SFA). As a reminder, there are 80 such plans on the “waitlist”. Could this be the crack in the dam that opens the flood gates?

Retirement Plan of Local 1102 Retirement Fund, the first mass withdrawal applicant, is seeking just over $3.7 million for 220 plan participants. I’ll be following this story closely and reporting as information becomes available. In addition to 1102, four other pension funds were permitted to submit revised applications, including America’s Family Benefit Retirement Plan, a Priority Group 1 member. They are one of just three members from that cohort that have not yet received SFA. They are hoping to secure $186.7 million for its 3,109 members.

The other three plans resubmitting applications are UFCW, Local 23 and Giant Eagle Pension Plan, Plasterers Local #1 Pension Plan, and Colorado Cement Masons Pension Trust Fund, who collectively are trying to secure $37.1 million for just under 7.5k plan members.

There is little to report this week beside the activity associate with the resubmission of four applications and the one initial application, as there were no applications approved, denied, or withdrawn.

U.S. interest rates (based on the Treasury yield curve) continued to rise last week as inflationary concerns escalated primarily due to uncertainty in the Middle East and its impact on the price of oil. Given the higher rates, new and future SFA recipients will be able secure those future benefits at a reduced cost. We’re pleased to provide you with a free analysis on just what those cost savings could be and how far into the future those benefits could be secured.

07.22.26
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A “Joe Friday” Moment

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

Jack Webb, who portrayed Joe Friday in the 1950s crime drama “Dragnet”, was famous for saying in season two “all we want are the facts, ma’am.” The catchphrase eventually morphed into a shorter phrase with the help of comedian, Stan Freberg, who released his parody “St. George and the Dragonet” in which he stated, “just the facts, Ma’am”. That phrase has been carried forward in Dragnet remakes. But, I digress.

Today, I present to you a Joe Friday moment. Here are the facts: Oil prices have risen by 27% since July 6th. U.S. Treasury yields are rising across the yield curve, and the 30-year Treasury yield is within 6 bps of this cycle’s high of 5.2%. The 10-year Treasury yield is currently 4.66% as of 10:24 am on 7/22/26. Investment grade corporate bond spreads have finally started to widen although slowly. According to Morgan Stanley, the “average” yield on a BBB+ corporate is 6.23% or roughly 1.1% higher than the yield on the comparable 30-year Treasury bond. Inflation, which moderated in June, is likely to spike higher given the current direction of activity in the Middle East and its impact on shipping lanes.

These are the facts. They suggest to me, and hopefully you, that the current U.S. interest rate environment is ripe for de-risking activities through cash flow matching (CFM). Why continue to live with the uncertainty surrounding oil, inflation, rates, etc., when you can SECURE your fund’s promises in the near-term?

I wish that I had a crystal ball to help me forecast the future but alas I don’t, and I suspect that you don’t either. Given the lack of clarity related to future events, I suggest that we live in the moment. We have an environment in which the cost of those future promises (benefit payments) can be cut dramatically. An environment that brings an element of certainty to a very uncertain process. An environment in which U.S. interest rates are providing plan sponsors with a significant portion of the annual return on investment target.

We’ve seen this scenario before. At the start of the 2000s, we had pension plans extremely well-funded and contribution expenses well-controlled. That opportunity went unheeded. The result of that inaction proved to be disastrous as we saw DB pension funding get pounded by two major equity market corrections. Are you confident that another major correction isn’t around the corner?

Like Joe Friday, I rely on the facts, which I’ve now presented to you. Ignore them at your peril.

05.29.26
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Important NIRS Statement related to Alaska

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

I recently published a post highlighting how powerful public pension funds are as an economic force. Despite DB pension fund demise in the private sector, they remain widely used to support hiring and retention of critical public servants. However, there are gaps in their usage and significant attempts have been made to shift the burden for a dignified retirement from the employer to the employee through DC offerings.

Recently, there was a bipartisan attempt by the Alaska legislation to reintroduce defined benefit plans to public sector workers, which were shuttered to new employees back in the early 2000s. Unfortunately, the bill was vetoed by Governor Dunleavy. The following text is a statement from Dan Doonan, Executive Director, National Institute on Retirement Security related to the Alaska situation. It is excellent!

Statement on Efforts in Alaska to Restore Pension Benefits to Address Grave Workforce Shortage

WASHINGTON, D.C., May 19, 2026 – In response to the veto of bipartisan legislation passed by the Alaska legislature to provide defined benefit pensions to Alaska’s public employees, the National Institute on Retirement Security (NIRS) issued the following statement today from Dan Doonan, NIRS executive director:

“Alaska’s effort to restore a pension plan for public workers represents meaningful progress in addressing one of the state’s most pressing challenges: attracting and retaining a stable, experienced public workforce. While Governor Dunleavy has vetoed the legislation, the fact that the measure passed both the House and Senate demonstrates a growing recognition that retirement benefits are not just about retirement security — they also are an essential workforce management tool.

For years, Alaska has faced deep and growing staffing shortages and retention problems across the public sector after closing its pension plans, especially in education and public safety. Pensions are a proven tool for helping employers recruit qualified workers, reduce costly turnover, and retain experienced employees who provide continuity and institutional knowledge. Too often, Alaska has served as a training ground where workers gain experience and then leave for other states that provide pension benefits and offer public employees financial security after careers serving their communities.

Research delivered by NIRS to the Alaska Department of Education found that Alaska’s shift away from pensions contributed to higher turnover among public education employees. Alaska is a rare example in which data was available to compare the behavior of workers in the same jobs and communities, with the same employers, but with different benefit offerings. That increased worker turnover in Alaska carries real costs for employers, taxpayers, and communities alike.

Importantly, the new pension tier approved by the legislature offered an innovative middle-ground design approach to protect taxpayer interests, with both risk- and cost-sharing features.

Despite the veto, the legislation is an important step forward because policymakers from both parties acknowledge that retirement plan design directly affects workforce stability and the quality of public services. Supporters rightly argued that offering a redesigned, innovative pension plan with taxpayers’ protections would help address chronic vacancies and improve retention in critical public-sector jobs.

We hope Alaska lawmakers continue this conversation and make another run at restoring a pension option in the future. States across the country increasingly recognize that pensions remain one of the most cost-effective tools available to build and sustain a strong workforce capable of delivering essential public services.”

The National Institute on Retirement Security is a non-profit, non-partisan organization established to contribute to informed policymaking by fostering a deep understanding of the value of retirement security to employees, employers, and the economy as a whole. Located in Washington, D.C., NIRS membership includes financial services firms, employee benefit plans, trade associations, and other retirement service providers. More information is available at www.nirsonline.org.

Thanks, Dan and NIRS, for your continuing advocacy for DB pension plans.

03.06.26
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Milliman: Corporate Pension Funding now at 109.4%

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

Milliman has released the latest monthly report on the Milliman 100 Pension Funding Index (PFI). As a reminder, this index analyzes the 100 largest U.S. corporate pension plans.

For February, the PFI funded ratio rose from 109.1% as of January 31, to 109.4% as of February 28, marking the highest collective funded ratio since the 109.9% mark observed in July 2001. However, the funding improvement was solely a result of asset performance, as declining discount rates of 14 basis points reduced the discount rate to 5.33% and raised the PFI projected benefit obligation (liabilities) to $1.235 trillion. Fortunately, monthly returns of 2.15% offset the impact of falling U.S. interest rates leading to growth in the market value of plan assets by $22 billion, to $1.351 trillion.

“February’s investment performance drove the month’s $5 billion gain in funding levels,” said Zorast Wadia, author of the Milliman PFI. He went on to say that “while this marks 11 straight months of funding improvements, further declines in interest rates may occur, and ongoing market volatility makes it vital for plan sponsors to undertake surplus-management strategies focused on both sides of the balance sheet.” We continue to support Zorast in recommending that managing assets to liabilities is critical for DB pension plans in all market environments, but especially given the significant uncertainty under which markets are currently operating. As a reminder, the primary objective in managing a DB pension is to SECURE the promised benefits at a reasonable cost and with prudent risk. It is NOT a return objective.

We, at Ryan ALM, do not forecast interest rates, but the impact of rising oil prices (WTI currently up 30.7% as of 9:13 am EST since Friday) will likely have an impact on inflation and interest rates. It will be interesting to see if a potential fall in the value of liabilities proves greater than the potential impact that rising rates might have on equity markets and other assets. Will we see the 12th consecutive month of improved funding levels?

Please click on the link below for a look at the complete Milliman corporate pension funding report.

View this month’s complete Pension Funding Index.

02.27.26
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Oh, Canada!

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

There were significant trade developments announced yesterday between the U.S. and Canada, which don’t seem to be getting the attention that they deserve. I wish that these developments were driven by Canada in retaliation for both the women’s and men’s gold medal performances in Italy, but it seems as if the U.S. is being a sore winner in this situation.

So, what happened yesterday? U.S. under President Trump has reclassified Canada from a Tier 1 allied trading partner to a Tier 3 restricted commerce nation through an executive order.​ Oh, boy, that sounds onerous. It seems as if this escalation follows tensions brought about by new U.S. tariffs on Canadian goods such as steel, lumber, and energy products prompting Canada to diversify partnerships with China, Mexico, and others. Previously, Canada ranked as the U.S.’s top export market and second-largest trading partner overall, with highly integrated supply chains in autos and energy. The move to tier 3 immediately increases tariffs to 35% on ALL Canadian goods – ouch! Furthermore, this classification places Canada in the same trading bucket as countries such as Belarus and Venezuela.

Not surprisingly, Canada, led by Prime Minister Mark Carney, is countering by pursuing deeper relations with China, Ecuador, Indonesia, and India to reduce U.S. reliance, which still accounts for nearly 70% of its exports. According to various press reports, the White House announced the order approximately two hours before it became public, automatically imposing a 35% tariff on all Canadian goods, financial restrictions, and a freeze on joint military contracts. Canadian Prime Minister Mark Carney responded within 90 minutes by announcing countermeasures in Parliament, including export controls on critical minerals, such as potash, and withdrawal from NORAD data sharing.​

This move is highly disruptive to integrated North American supply chains. The decision followed escalating U.S. tariffs and was defended in Trump’s recent State of the Union address.​​ Canada now faces sharp export declines to its largest market, potentially worsening its trade balance and likely depreciating the Canadian $. Business investment drops due to higher costs for US machinery, leading to layoffs, reduced GDP growth, and sustained inflation from tariff pass-throughs. The potential for retaliatory measures like export controls on minerals will further strain relations between these two long-term allies.

Please don’t think that this development only strikes at Canada’s economy. US consumers and industries will see higher input costs such as steel, which estimates suggest could be as high as $7.5B+, leading to inflation and eroding competitiveness in batteries, clean energy, and defense. Canadian retaliation reduces US exports, impacts GDP, and exacerbates supply chain vulnerabilities with no quick domestic substitutes.

Higher inflation will impact interest rates, leading to higher costs of borrowing, and depending on the significance of these developments could lead to a bear market environment and an economic slowdown concurrent with existing labor force concerns. So, why isn’t this getting more attention?

02.10.26
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ARPA Update as of February 6, 2026

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

It looks like those of us in the Northeast will finally get some respite from the bitter cold, as temps will moderate this week and actually hit the 30s. However, those multiemployer pension plans currently sitting on the waitlist and classified as a Plan Terminated by Mass Withdrawal before 2020 Plan Year, continue to be frozen in place. According to the PBGC’s latest update, there are 80 plans that fall under the Mass Withdrawal classification. I’ll share more info on this subject later in this post.

Regarding last week’s activity, the PBGC is reporting that one fund, Operative Plasterers & Cement Masons Local No. 109 Pension Plan, a Troy, MI, construction union, will receive $13.7 million for the 1,439 plan members. In addition to the one approval, there was another fund that withdrew its initial application. Norfolk, VA-based International Association of Bridge, Structural, Ornamental and Reinforcing Ironworkers Local No. 79 Pension Fund was seeking $14.6 million in SFA for 462 participants in the plan.

There were no applications submitted for review. It appears that only one non-mass withdrawal plan, Plasterers Local 79 Pension Plan, remains on the waitlist. Fortunately, there were no plans asked to rebate a portion of the SFA grant due to census errors or any funds deemed no eligible.

Regarding the 80 mass withdrawal funds currently sitting on the waitlist, MEPs terminated by mass withdrawal under ERISA §4041A(a)(2) are explicitly ineligible for SFA under ARP/IRA rules, regardless of application timing. Furthermore:

No “initial application” option exists post-termination date.

Mass withdrawal means that all/substantially all employers completely withdraw leading to a plan termination.

PBGC SFA statute excludes §4041A(a)(2) terminated plans.

For the 80 funds sitting on the waitlist, it seems like a long shot that the APRA legislation will be amended to accommodate these funds seeking SFA. I’ll continue to monitor this situation in future posts.

02.02.26
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ARPA Update as of January 30, 2026

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

So much for escaping the bitter cold in New Jersey by flying to Orlando, FL. The reality is that Orlando is sitting at 25 degrees this morning (Sunday 2/1). Someone is playing a nasty trick on all those snowbirds. It is a good thing for me that I’ll be spending most of my time in a conference room until Wednesday (FPPTA). I hope that you have a great week.

Regarding ARPA and the PBGC’s continuing implementation of this critical legislation, there was activity last week, and some of it was surprising. As I’ve mentioned on several occasions, the ARPA legislation specifically states that all initial applications seeking special financial assistance (SFA) needed to be submitted to the PBGC by 12/31/25. Revised applications could be resubmitted after that date and until 12/31/26. That said, there were three initial applications filed with the PBGC during the week ending January 30th. What gives?

In other news, Cincinnati-based Asbestos Workers Local No. 8 Retirement Trust Plan received approval for SFA. They will get $40.1 million to support their 451 plan participants. In other news, Local 1814 Riggers Pension Plan, withdrew its initial application which had been filed through the PBGC’s e-Filing portal last October. They are hoping to secure a $2.5 million SFA grant for their 65 members.

Fortunately, there were no previous recipients of SFA asked to repay a portion of the grant due to census errors nor were any applications denied due to eligibility issues. Lastly, no new pension plans asked to be added to the waitlist which currently numbers more than 80 systems.

The U.S. Treasury yield curve remains steep, with 30-year bond yields exceeding the yield on the 2-year note by 1.34% as of Friday’s closing prices. This steepening provides plan sponsors and grant recipients with attractive yields on longer maturity cash flow matching programs used to secure the promised benefits.