Creating a Clear Path to De-Risking
Rapid economic, accounting and regulatory change. Ongoing market volatility. Increasing longevity. Unpredictable funding requirements. All of these factors are challenging defined benefit pension plan sponsors—and all can have a significant impact on business risk over the long term. This brochure explores innovative strategies for helping sponsors reduce risk while fulfilling fiduciary obligations—strategies that include buy-out, buy-in and longevity reinsurance solutions.
As plan sponsors look down the path to reducing pension risk Prudential stands ready to assist. We can customize a risk transfer solution for plan sponsors, and will lead the evolution of the market based on the needs of clients of every size and scale. With solutions that deliver complete or partial transfer of risk Prudential helps sponsors honor commitments to participants, reduce volatility and lower administrative, actuarial and investment expenses. Most importantly, our solutions provide the reassurance of Prudential’s powerful guarantees.
Twice in the past 12 years, America’s corporate defined benefit (DB) plan sponsors have seen their plans’ funded status deteriorate over 30% in market downturns. These declines have strained plan sponsors’ finances, and compelled the 100 largest U.S. corporate pension plans to make approximately $230 billion in pension contributions between 2009 and 2012. Although recent equity markets improvements and rising interest rates have improved funded status, the funding index remains well below levels witnessed in 2007.