10 Things You Need to Know About the Pension Settlement Marketplace
Item #6: There is a growing collection of research and analysis that supports the corporate finance value of transferring pension risk….paying to remove these obligations can be an efficient use of company capital.
Item #7: Pension Risk Transfer media coverage and marketing $$$ are beginning to take hold and pension sponsors are increasingly becoming educated and asking questions about settlements.
Item #8: What if the next 5 years don't produce consistently rising asset values and higher interest rates??? Settling liabilities means coming to term with the real economics of the obligations.
Item #9: Self-insuring a frozen pension plan diverts resources
away from managing and growing your core business.
Item #10: Settling pension liabilities requires additional services and expertise which falls outside the scope of standard pension consulting services
Item #1: For frozen corporate DB plans….settlement is a matter of “WHEN” & “HOW” not “IF”!
Item #2: According to a national consulting firm ‘s analysis, total pension settlement activity over the next 5 years is expected to be $35-$100 billion…..compared to under $10 billion for the collective last five years.
Item #3: Settlement activity and interest is increasing despite the low interest rate/high cost environment. The list of large and mid-sized corporate pension sponsors who are executing settlement projects is growing daily and well chronicled by the media.
Item #4: This year witnessed the decision to purchase the largest single premium group annuity contract ever to closeout $20+ billion in pension liabilities. This transaction is collectively larger than the ENTIRE MARKETPLACE of sold annuity buy-out contracts over the last dozen years.
Item #5: According to a recent survey of senior level financial executives:
53% were “somewhat to very likely” to offer lump sum pension
buy-outs to terminated vested employees (10% are already doing so)
41% were “somewhat to very likely” to transfer pension liabilities
through annuities
For more information contact: Jay Dinunzio [email protected] Phone: 860-507-6344
