Data Spotlight: Rising Rates Pose New Opportunities for Pension Risk Transfer?

Perspectives, January 2017

In a Q4 P&I conference survey of 200+ plan sponsors, the top barrier cited to transacting was low interest rates. The Federal Reserve central bankers expect further rate increases in 2017 and 2018 which has many plan sponsors at least exploring the possibility of transacting. Will 2017 unlock pent-up demand for buy-outs?

Nearly 1 of out every 2 sponsors is considering or has already transferred pension risk.Somewhat likely to transfer risk 34%

Nearly 1 of out every 2 sponsors is considering or has already transferred pension risk.
  • Somewhat likely to transfer risk 34%
  • Very likely 14%
  • Have already transferred risk 1%
  • Not at all likely 18%
  • Don't know 33%
Top Barriers:
  1. Interest rates
  2. Increased plan sponsor contributions
  3. Pension expense impact on the income statement

 

 

1 Pensions & Investments 2016 Settlement Strategies Conference.