Today 401k plans are replacing defined benefit pension plans as the primary retirement plan structure for many employers. This has been a trend for over the past several decades due to regulatory, accounting, and funding requirements imposed on defined benefit plans most recently under the Pension Protection Act of 2006. (PPA) Typically the first step toward plan termination involves freezing plan benefit accruals. Once benefits have been frozen future service costs are eliminated, however, other plan financial and longevity risks remain. In order to fully mitigate these risks and ongoing administrative costs plan sponsors can elect to annuitize plan benefit obligations utilizing a single premium group annuity contract known as a terminal funding contract.
Over the past 35+ years we have placed more than 2,000 single premium group annuity contracts guaranteeing almost $8 Billion in annuity payments for close to 300,000 participants.