Special Report: How to Ensure a Smooth Pension Risk Transfer
For employers, the number of reasons they should consider offloading some or all of their pension liabilities from their balance sheets seems to be growing every year. On average, beneficiaries are expected to live longer than they have in the past; generating returns to cover liabilities is becoming more challenging in a low interest rate environment; and premiums for the Pension Benefit Guaranty Corporation (PBGC) keep rising.
Already, many plan sponsors are expected to power through deals this year. After the pandemic dampened deal flow for the first part of last year, the market is expected to continue its “steady upward trend,” according to Willis Towers Watson.
Pension risk transfers (PRTs) can be straightforward for plan sponsors. But without careful preparation, offloading liabilities can be costly and overlong endeavors for employers. To make these deals attractive to insurers from the start, plan sponsors should get a couple things in their house in order.
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