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Pension risk transfer options and considerations

2023-11-07

Justin Owens, CFA, FSA, EA

Senior Director, Co-Head of Total Solutions

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Defined benefit
Governance and risk management

Are pension risk transfer solutions appropriate for your organization? Discover options to determine if it fits well within your long-term risk management goals.

In 2012, Ford, GM and Verizon took action to reduce the size of their pension plans, which served as the watershed moment for pension risk transfer. Since then, lump-sum offerings have become ubiquitous. Annuity purchase transactions have taken more time to catch momentum, but each year, the volume increases, with more sponsors open to offloading liabilities to insurers. Termination continues to be rare among larger defined benefit (DB) plan sponsors, but many sponsors maintain that termination is their ultimate goal.

In this paper, we cover the risk transfer options available to DB plan sponsors and the considerations of pursuing this type of strategy.

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