Pension Risk Transfer

DIETRICH offers uniquely crafted Pension Risk Transfer strategies specifically designed for each of our plan sponsor clients.

Pension Risk Transfers Are Top of Mind

Pension risk transfer helps plan sponsors with the goal of financial security for a companies’ current and future employees enrolled in the plan.

The transferring of risk from defined benefit pension plans has become a focus of pension plan providers, participants and policy makers.

This transaction can include:

• The purchase of annuities from an insurance company to transfer all or a portion of the plan liabilities;
• The payment of lump sum to pension plan participants that satisfy the portion of liability of the plan for those participants; or
• The restructuring of plan investments to reduce risk to the plan sponsor.

Industry related names for these types of transactions include buy-ins, buyouts, plan terminations and lift-outs.

Regardless of the decision on how to move forward, the plan sponsor is doing so with the outcome of reducing or removing risks that correlate with funding and running their plan.  This will in turn transfer the risk of fulfilling the pension liabilities to plan participants.

A Pioneer

DIETRICH has pioneered the use of group annuity contracts to irrevocably transfer risk from the plan sponsor to highly rated insurance companies.

Pension risk transfer liability reduction strategies are formulated for each plan sponsor depending on specific plan structure, duration and demographics. These strategies will be presented to plan sponsors with the recommendation to transfer pension risk in full or in a prescribed systematic basis over a period of years.

Similar strategies can be employed to create and maintain a pension liability “ceiling” benchmark as well.