Many people associate de-risking defined benefit plans with times of market volatility, but pension risk transfer strategies designed and executed during periods of relative market stability are often most effective to mitigate risk in an efficient and cost-effective manner.

 Why have those who have transferred pension risk to an insurer chosen to do so? A new survey1gives some answers: 

What are the most important factors in your organization’s decision to pursue a group annuity purchase? “A desire to…”

Manage the total costs of the organization's pension plan 33%
Mitigate the impact of rising PBGC premiums, including potential future changes 33%
Mitigate the impact of changing actuarial mortality assumptions, including potential future changes 33%
Reduce the plan's asset-related volatility 31%
Focus the organization on its core business (rather than on pension issues) 25%
Reduce the number of smaller-benefit payments being made 25%

Four Reasons to Transfer Your Pension Risk

  • Minimize the risk around plan contributions
  • Improve consistency of financial results and realize corporate finance benefits
  • Allow greater focus on the firm’s core business
  • Enhance retirement security for employees and retirees

1 "Finance Chiefs Express High Satisfaction With Pension Risk Transfers," CFO Research, August 2017.

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