A Brief Guide to the SFA Program

In this paper, we plan to approach the Special Financial Assistance (SFA) program from an investment perspective. First, we describe the interest rate rules. Next, we offer some ways in which investors may think about their legacy assets relative to their new SFA funds. This section concludes by outlining a strategy in which SFA funds are used to cash flow match expected future liability payments. Overall, the health of a Plan will determine how much SFA funding is available, and the total amount of SFA funding awarded will likely determine the degree to which this program should reasonably impact an investor’s total portfolio strategy.