Tag Archives: sfa

06.02.25
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ARPA Update as of May 30, 2025

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

Welcome to the last update for May 2025. It sure seems like the year is flying by. Are we having fun yet?

It has been nearly four years (July 2021) since the PBGC began implementing the ARPA pension legislation. Despite a few stumbles, I think that the program has been a huge success. Somewhat surprisingly, we are still seeing multiemployer pension plans being added to the waitlist as they seek a share of the Special Financial Assistance (SFA). In fact, an additional 5 funds were added to the waitlist in the last week.

In other news, there were no applications submitted to the PBGC for review, as their eFiling portal remains temporarily closed. There are currently 24 applications in the PBGC’s queue, with seven needing to be completed in some way by the end of June and another seven by the end of July. There was one application approved, as Sheet Metal Workers’ Local No. 40 Pension Plan received approval for an SFA grant of $9.9 million including interest for the plan’s nearly 1,000 participants.

There was one application withdrawn, as Retail Food Employers and United Food and Commercial Workers Local 711 Pension Plan withdrew a revised application seeking $64.2 million in SFA for the plans 25,306 participants. Perhaps the third submission will prove successful. Lastly, there were no applications denied nor asked to repay a portion of the SFA grant. As I’ve been reporting, we are likely very near the end of the census error issue repayments.

When the original Butch Lewis Act (BLA) was being legislated it was estimated that approximately 114 multiemployer plans would be eligible for a “loan”. There are currently 100 more funds seeking support. If I remember correctly, everything needs to wrap up regarding this legislation by December 31, 2026. Clearly, there is still a ton of work ahead for the PBGC.

05.12.25
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ARPA Update as of May 9, 2025

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

Happy belated Mother’s Day to all the Moms. We hope that you had a special day.

Pleased to report that the PBGC had a very productive week ending last Friday. There were several actions taken including the filing of three initial applications from the waitlist. Alaska United Food and Commercial Workers Pension Fund, Local 73 Retirement Plan, and Local 807 Labor-Management Pension Fund are hoping to secure nearly $300 million for just over 10k plan participants. With these filings, the PBGC currently has 29 applications under review. As a result, their eFiling portal is temporarily closed. As per the legislation, they must act on an application within 120 days. The United Food and Commercial Workers Unions and Employers Pension Plan application reaches that milestone on May 17th. As a reminder, they are seeking $54 million in SFA for there more than 15k members. The PBGC will have its hands full during the next month, as 10 pension plans have applications hitting their 120-day window during June.

In other ARPA news, there were no applications approved, denied, or withdrawn during the past week. However, there was one more fund that repaid a portion of the SFA grant received due to census errors. Local Union No. 863 I.B. of T. Pension Plan repaid $3.2 million in SFA or about 1% of the grant received. To date, 55 plans have reported on potential census errors prior to the PBGC having access to the Social Security Master Death File. Of those 55, 51 have repaid a portion of the proceeds received totaling $214.8 million or 0.44% of the $48.4 billion in SFA received by those funds.

Lastly, there was one more plan added to the waitlist. Greenville Plumbers and Pipefitters Pension Fund becomes the 119th pension fund to seek SFA without being a priority group member. As reflected below, there are 38 pension funds from the waitlist that have yet to file an application with the PBGC.

Recent activity within the U.S. Treasury market have pushed long-term rates up. As of this morning, the 30-year Treasury Bond yield is at 4.89%, while the 10-year Treasury Note’s yield is at 4.48%. Both are quite attractive for a plan looking to secure the promised benefits through the SFA grant.

05.06.25
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ARPA Update as of May 2, 2025

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

I think someone forgot that the calendar flipped from April to May. The April showers have been followed by the May monsoons in New Jersey. The May flowers may be washed out to see!

Regarding the ARPA implementation by the PBGC, the current efiling portal is describes as limited, which is certainly far better than the frequently mentioned “temporarily closed” status. As a result, there were three new applications submitted during the past week. Local 1102 Retirement Trust, IBEW Eastern States Pension Plan, and Local 1922 Pension Plan are each classified as non-priority group members. In the case of Local 1922, its application was revised. In total, these three funds are seeking $53.7 million in special financial assistance (SFA) for just over 6k participants.

In other ARPA news, Aluminum, Brick & Glass Workers International Union, AFL-CIO, CLC, Eastern District Council No. 12 Pension Plan, a Wyomissing, PA based plan, has received approval of its revised application. They will receive $8.5 million for the 580 members of its pension plan. This was the first application approved in nearly a month.

Happy to mention that there were no applications denied, withdrawn, or asked to repay excess SFA during the last week. However, there were two additional plans added to the waitlist. Sports Arena Employees Local 137 Retirement Fund and Retirement Plan of Local 1102 Retirement Fund have been added to the waitlist. In total, 119 non-priority funds have sought SFA through the waitlist process. Neither of these funds locked-in a date for valuation purposes on the discount rate. Four funds have not currently chosen a lock-in date.

There are still 43 plans that have yet to submit an application for review, with all but one of those a non-priority group member. Despite significant recent volatility, U.S. Treasury interest rates, particularly 10- and 30-year maturities, are enjoying fairly robust yields. The 30-year yield is once again above 4.8%. This level of rates provides pension plans receiving the SFA some additional cost reduction to defease benefit payments.

04.25.25
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A Call for Pension Reform – Five Years Later

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

On March 25, 2020, I produced a post titled, “Why Pension Reform is Absolutely Necessary“. A few of you may recall that blog. I penned the post in reaction to a series of statistics that my friend John A. produced. John is a retired Teamster and an incredibly important driver behind efforts to reinstate benefits that had been cut under MPRA. John’s analysis was based on a survey that he conducted on multiemployer plans that had roughly 43,000 plan participants impacted by that misguided legislation. That universe of participants would grow to more than 75,000. What he discovered through his polling and outreach was shocking!

Their benefit reductions amounted to nearly $34,000,000 / month.  (That is a ton of lost economic activity.)

95% were not able to work.

72% were providing primary care for an ailing loved one.

65% were not able to maintain healthcare insurance.

60% had lost their home.

55% were forced to file for bankruptcy.

80% were living benefit check to benefit check.

100% of the PBGC maximum benefit payout was inadequate ($12,870 for a retiree with 30-years of work).

50% of the retirees were U.S. service veterans.

Shocked? I certainly was and continue to be that our government allowed the benefits to be cut for hard working American workers who rightfully earned them through years of employment.

Where are we today? Fortunately, the got the passage of ARPA pension reform (originally referred to as the Butch Lewis Act) which was signed into law by President Biden in March 2021. Responsibility to implement the legislation fell to the Pension Benefit Guaranty Corporation (PBGC). In my original blog post, I referred to a potential universe of 125 multiemployer plans that might be eligible for Special Financial Assistance (SFA). That list would eventually become 204 plans (see below).

I’m extremely pleased to announce that 119 funds of the 204 potential recipients have received more than $71.6 billion in SFA and interest supporting the retirements of 1,555,460 plan participants. Awesome! There is still much to do, and hopefully, the sponsors of these funds will prove to be good stewards of the grant $s by conservatively investing the SFA and reserving the risk taking for the legacy assets that have time to wade through challenging markets.

What an incredible accomplishment! So many folks would have been subject to very uncertain futures. The securing of their benefits goes a long way to allowing them to enjoy their retirement years. Unfortunately, there are too many American workers that don’t have a defined benefit plan. In many cases they have an employer sponsored defined contribution plan, but we know how challenging it can be for those participants to fund, manage, and disburse that benefit. For many others, there is no employer sponsored benefit. Their financial futures are in serious jeopardy.

That said, what appeared to be a pipe dream once the U.S. Senate failed to take up the BLA legislation has become an amazing success story. Just think of all the economic activity that has been created through these monthly payments that certainly dwarf the $34 million/month mentioned above. Congrats to all who were instrumental in getting this legislation created and passed!

04.14.25
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ARPA Update as of April 11, 2025

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

For those observing, may you have a good Passover and a Happy Easter. I was busy this past weekend stuffing 220 eggs with goodies for our 11 grandkids! Let’s hope that weather cooperates. I’m not overly confident on that happening given that we actually had snow during the weekend in northern NJ.

With regard to ARPA and the PBGC’s implementation of this critical legislation, three more plans received approval of their applications during the past week. Bricklayers Pension Fund of West Virginia (revised), United Wire, Metal and Machine Pension Plan (initial), and Local 945 I.B. of T. Pension Plan (revised), all non-priority group members, will receive a combined $289.1 million in Special Financial Assistance (SFA), including interest and FA loan repayments. This brings the total number of pension plans receiving SFA to 119 funds and more than $71.6 billion in grants.

There was no apparent activity beyond the approvals mentioned above, as the PBGC’s eFiling portal remains temporarily closed. The prior week also saw no applications withdrawn or denied, no excess SFA repaid, and no new plans added to the waitlist.

Of the 87 pension plans with a priority designation, 74 have now received approval for an SFA grant (85%) – outstanding! The PBGC still has quite a bit of work to do with 85 plans still in the queue for approval. Fortunately, the challenging capital markets have seen U.S. interest rates rise providing plan sponsors recipients of the SFA to realize greater cost savings and extended coverage through cash flow matching strategies. There is little reason to take on unnecessary risk while uncertainty rules the day.

03.31.25
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ARPA Update as of March 28, 2025

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

Welcome to the last update of March. If you are a fan of both Men’s and Women’s college basketball, there wasn’t as much “madness” as usual during the respective tournaments, as all #1 seeds made the men’s Final Four, while only teams seeded either #1 or #2 made the woman’s Final Four. However, these teams should make for a very exciting and competitive games as they conclude. I’m still waiting for Fordham to get there one day.

Now onto the task at hand. Regarding ARPA and the PBGC’s implementation of this critical legislation, last week was fairly busy. Three non-priority group funds, including United Food and Commercial Workers Unions and Participating Employers Pension Plan, Roofers Local 88 Pension Plan, and Chicago Truck Drivers, Helpers and Warehouse Workers Union (Independent) Pension Fund, filed initial applications seeking a total of $241.7 million in Special Financial Assistance (SFA) that will support the promised benefits for 14,769 workers. There are 22 funds that currently have an application before the PBGC.

In addition to the new fillings, Oregon Processors Seasonal Employees Pension Plan, received approval of its revised application. They will receive $19.9 million in SFA and interest to help cover the promised pensions for 7,279 members. There were no applications denied during the previous week, but there were a couple of initial applications from non-priority group members withdrawn. Distributors Association Warehousemen’s Pension Trust and Alaska Teamster – Employer Pension Plan were seeking $206.6 million in SFA for nearly 12,200 participants.

In other ARPA news, the PBGC recouped  $994,701.30 or 1.55% in excess SFA paid by The Newspaper Guild International Pension Plan. The PBGC has now recouped $202.2 million in excess SFA from grants totaling $47.5 billion or 0.42% of the proceeds. These funds, including another 4 that didn’t receive any excess proceeds, were among the roughly 60 that received awards before they were given access to the Social Security’s Master Death File.

Lastly, there was one more multiemployer fund added to the waitlist. The Plasterers Local 79 Pension Plan becomes the 117th plan to be placed on the waitlist. Fortunately, the PBGC has begun the process on all but 45 of those.

03.03.25
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ARPA Update as of February 28, 2025

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

Welcome to March!

We are pleased to provide you with the latest update on the PBGC’s implementation of the ARPA pension legislation. The last week saw moderate activity, as the PBGC’s eFiling portal was temporarily open providing three funds, Local 810 Affiliated Pension Plan, Aluminum, Brick & Glass Workers International Union, AFL-CIO, CLC, Eastern District Council No. 12 Pension Plan, and Sheet Metal Workers’ Local No. 40 Pension Plan the opportunity to submit revised applications seeking Special Financial Assistance. The PBGC has until June 26, 2025, to act on the applications that combined are seeking $112.6 million in SFA for 3,001 plan participants.

In addition to the above-mentioned filings, one pension fund, Roofers and Slaters Local No. 248 Pension Plan, a Chicopee, MA-based fund, withdrew its initial application that was looking for roughly $8.4 million in SFA for 202 members of the plan. As I said, there was moderate activity last week. Fortunately, no multiemployer pension plans were denied SFA and no other plans repaid excess SFA as a result of census issues. There were also no plans approved or added to the waitlist, which contains the names of 116 plans, of which 47 have yet to submit an application.

As you may recall, I wrote a post last week titled, “A Little Late to the Party!“. The gist of the article had to do with an effort on the part of a couple of Congressmen to get the Justice Department involved in the repayment of any excess SFA funds that have been distributed to the 60 funds that received SFA prior to the use by the PBGC of the Social Security Administrations Death File Master. As I’ve reported, this process is well underway (41 funds have repaid a portion of the SFA to date), having begun back in April with the Central States plan. It is unfortunate that pension plans used to have access to this master file, but that ability was rescinded years ago over privacy concerns. ARPA has been a huge success. The repayment of excess SFA should not taint the tremendous benefit that this legislation has brought.

02.24.25
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ARPA Update as of February 21, 2025

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

Welcome to the last week in February. Spring can’t arrive soon enough in New Jersey!

Last week the Milliman organization published its annual review of the state of multiemployer pension plans. The news was quite positive, but in digger deeper, it became apparent that the payment of the Special Financial assistance (SFA) was the primary reason for the improved funding ratios. Given how critically important the SFA is to the ongoing success of many of these plans, let’s look at what transpired during the previous week.

According to the PBGC’s weekly spreadsheet, there were no new applications filed as the eFiling portal remains temporarily closed. In addition, no applications were approved or denied, but there was one application withdrawn, as non-priority plan Aluminum, Brick & Glass Workers International Union, AFL-CIO, CLC, Eastern District Council No. 12 Pension Plan (the plan’s name is longer than the fund’s size is large) pulled its application seeking $10.6 million for 580 participants.

There was some additional activity though, as five plans were asked to repay a portion of the previously agreed SFA due to census errors. In total, these plans repaid $16.3 million representing just 1.06% of the grants received. To date, $180.8 million has been reclaimed from grants totaling $43.6 billion or 0.41%.

In other news, we had Bricklayers & Allied Craftworkers Local No. 3 NY Niagara Falls-Buffalo Chapter Pension Plan, added to the waitlist (#116). This is the first addition to the list since July 2024. This plan did not elect to lock-in the interest rate for discount rate purposes, joining a couple other plans that have kept their options open.

We should witness dramatic improvement in the Milliman funded ratio study next year, as about 7% (85 funds) were funded at <60% in 2024. There are currently 94 plans seeking SFA support. If granted, they should all see meaningful improvement in the funded status of their plans. As a result, we could have a situation in which the multiemployer universe becomes fully funded. How incredible. Now, let’s not do something silly from an investment standpoint that would jeopardize this improved funding.

02.21.25
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Milliman’s Multiemployer Study Released

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

Milliman released the 2024 year-end results of its Multiemployer Pension Funding Study (MPFS). The MPFS analyzes the funded status of ALL U.S. multiemployer DB pension plans. As of December 31, 2024, Milliman estimated multiemployer plans have an aggregate funded ratio of 97%, up from 89% as of December 31, 2023. Impressive!

Milliman determined that the improved funded status was largely due to investment gains, but they also highlighted the critical contribution from the special financial assistance (SFA) granted under the ARPA. Milliman highlighted that as of year-end 2024, 102 plans have received nearly $70 billion in SFA funding, including $16 billion paid during 2024. Incredibly, without the support of SFA grants, the MPFS plans’ aggregate funded percentage at year-end 2024 would be approximately 89% or the same as the end of December 2023. As my chart below highlights, as of today, 109 plans have now received $71 billion in SFA grants.

Chart provided by Ryan ALM, Inc.

According to Milliman, “53% (627 of 1,193 plans) are 100% funded or more, and 84% (1,005) are 80% funded or better.” They also highlighted the more challenged members of this cohort, stating that “7% of plans (85) are below 60% funded and may be headed toward insolvency. Many are likely eligible and expected to apply for SFA in 2025.” As the chart above highlights, there still 93 plans going through the process of submitting applications with the PBGC to receive SFA support.

ARPA’s pension reform legislation has clearly been a godsend to many struggling multiemployer plans (roughly 10% of ME plans to date). That said, a review of the universe of all multiemployer plans points to terrific stewardship of the retirement assets on the part of a significant percentage of plans. My one concern is that the use of the return on Asset (ROA) assumption by most of these plans as the discount rate for plan liabilities is overstating the true funded status relative to a discount rate of a blended AA corporate rate used by the private sector. Milliman’s other DB pension plan studies have public sector plans at an 81.2% funded ratio and private plans at 105.8%.

02.18.25
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ARPA Update as of February 14, 2025

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

Credit to the PBGC for not letting Valentine’s Day get in the way of a productive week, as they continue to implement the ARPA legislation, which is quickly approaching its fourth anniversary!

The eFiling portal has been sporadically open since the beginning of the year. Last week they turned the spigot on a little more, as three non-priority group plans submitted applications, including Teamsters Local 277 Pension Fund, Teamsters Local 210 Affiliated Pension Plan and Cement Masons Local No. 524 Pension Plan. In the case of Local 277, this was the initial filing, while the other two submitted revised applications. In total, these three pension plans are seeking $153.2 million in SFA for the nearly 10k participants.

In other news, the checks are no longer in the mail, as Laborers’ Local No. 265 Pension Plan, Local 734 Pension Plan, Upstate New York Engineers Pension Fund, and The Legacy Plan of the UNITE HERE Retirement Fund received the approved SFA plus interest and FA loan repayments. The $800 million gorilla within this group was Unite Here receiving $868.8 million from a total distribution of $1.1 billion. I suspect that the 103,118 members of these plans slept pretty well this weekend knowing that the promised benefits had been secured.

I’m pleased to report that no applications were denied during the past week. In addition, there were no plans required to repay excess SFA on account of census issues. Lastly, there were no new funds seeking inclusion on the waitlist. The chart below highlights where we are in the process. Despite the significant progress to date, there remains quite a bit of work for the PBGC.

Don’t forget, the legislation requires pension funds receiving SFA to rebalance the allocation between fixed income and equities back to 67%/33% one day every 12-months. Given the significant outperformance of equities vis-a-vis bonds plus the monthly benefit payments most likely coming from the fixed income program, there should be some significant rebalancing needs. It seems like a good time to reduce risk and take some profits.