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Industry

Hibernation’s Wake Up Call

A pension plan is a non-core business with significant costs and risks. Over the last 19 years there have been nearly $800 billion in cash contributions in just the largest 100 U.S. pension plans. Yet, despite significant contributions and favorable equity market returns, funded status has not meaningfully recovered from the low of the financial...
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Pension Risk Transfer: Plan Terminations, Buyouts, Lift-Outs and Buy-Ins

Pension risk transfer (PRT) helps companies deliver on their promises. It can take several forms, all with the goal of ensuring the financial security of a company’s employees, past or present, who are enrolled in the plan. We’ll look at buyouts and buy-ins, plan terminations, and lift-outs, and why a company’s CFO might take one...
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PRT Deals Can Have ‘Positive Impact’ on Companies’ Market Values

The share prices of companies that have transferred their pension obligations to an insurer typically perform better than their peers', according to analysis by Mercer. The firm found that in general, undertaking a pension risk transfer (PRT) does not appear to be hindrance, with “reasonable evidence” that it can have a positive impact on the...
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Optimizing PRT Timing and Execution

Price monitoring may unlock opportunities for plan sponsors in today's market environment.
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How to Manage DB Plans Through the Crisis

Defined benefit (DB) plan sponsors took an unexpected hit when the market crashed because of the COVID-19 pandemic, and many found past strategies they used in bear markets needed to be tweaked for the unprecedented volatility that followed.
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The Game of Pension Risk Transfer Continues

Many employers with defined benefit pension plans would love to put responsibility for the plans in the hands of a life insurer, by buying a large group annuity contract.  Predictions about how the current COVID-19, stock price and interest rate turmoil will affect the market for pension risk transfer annuities are.... highly diverse.
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US Corporate Pensions See Shocking $93 Billion Funding Gain in March

Defying forecasts of another grim month due to global market volatility, the funded status of the 100 largest US corporate pension funds surprisingly increased $93 billion in March despite deteriorating economic conditions amid the COVID-19 pandemic. Just a month after hitting its lowest level in more than three years the Milliman 100 Pension Funding Index...
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Pension Risk Transfer Capacity is Still Out There

At least some big life insurers are eager to sell the big group annuities used in the pension risk transfer business.  Legal & General Group PLC and Global Atlantic Financial Group Ltd. have both put out signals that they're still hungry for pension risk transfer deals. Legal & General reported last week that it completed...
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DB Plan Relief Included in the CARES Act

The CARES (Coronavirus Aid, Relief and Economic Security) Act signed into law March 27 not only includes provisions related to defined contribution (DC) plans, but it also provides relief for defined benefit (DB) plan sponsors.
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Rising Funded Levels, PBGC Premiums Spur Pension Buyout Record

The US single-premium pension buyout market set a record with 501 contracts sold in 2019, according to the LIMRA Secure Retirement Institute, and sales are expected to increase again this year as the markets become increasingly volatile as a result of the coronavirus.
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