July 2024
03Jul

General Electric sued over pension risk transfers to Athene

The employees accused Athene of violating ERISA and of “investing in lower-quality, higher-risk assets without the traditional mix of quality assets to support future benefit obligations,” in the case of Bueno et al. vs. General Electric Co. et al. filed June 28 in a U.S. District Court in Syracuse, N.Y. The lawsuit seeks class-action status, saying approximately 70,000 people could be affected by the pension risk transfer that was announced in December 2020. Athene is not a defendant, and neither is...

July 3, 2024
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June 2024
27Jun

UK. DB schemes taking steps to manage risks as funding positions improve

Defined benefit (DB) pension schemes have taken advantage of last year’s “relative calm” to make progress on endgame planning, net-zero targets, and tackling diversity, equity and inclusion (DE&I) issues, research from LCP has revealed. LCP’s latest Chart Your Own Course report found that many schemes have seen improvements to their funding positions and are exploring various endgame options. In particular, LCP found that completing a de-risking transaction remained a top priority for many, cited as a key priority in the coming year...

June 27, 2024
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19Jun

US. Milliman analysis: Competitive pension risk transfer costs inches down in May, from 100.9% to 100.7%

Milliman, Inc., a premier global consulting and actuarial firm, today announced the latest results of its Milliman Pension Buyout Index (MPBI). As the pension risk transfer (PRT) market continues to grow, it has become increasingly important to monitor the annuity market for plan sponsors that are considering transferring retiree pension obligations to an insurer. During May, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process decreased slightly, from 100.9% of a plan’s accounting...

June 19, 2024
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06Jun

Beware of DB pension risk blind spots – What gets measured gets managed

It is often said that “What gets measured gets managed” and it is simple to find many examples, inside and outside of the pensions arena, where this adage applies. However, in some contexts, especially when measuring uncertain financial liabilities and risks, it is not merely “what” is measured that matters but also “how” it is measured that is important. Applying different principles to measurement can significantly influence the actions taken with the potential for material financial ramifications. One common measurement of...

June 6, 2024
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05Jun

US. Now It Is About Protecting Healthy Funded Levels

Corporate defined benefit pension plan sponsors have a singular opportunity to evaluate if their plans are in a position to offload liabilities using pension risk transfer or allocate to strategies with less risk, including liability-driven investing, reviewing their options to best provide pension benefits to the participants to whom they were promised at the lowest cost for the company going forward. Separate Milliman and Principal Asset Management research on pension plan funding finds sponsors have room to now accelerate de-risking—as...

June 5, 2024
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May 2024
29May

US. Pension risk transfer premiums rise in April — Milliman

U.S. pension risk transfer premiums among the most competitive bidding processes rose in April, a study by actuarial and consulting firm Milliman showed. The estimated average premium among the most competitive rates was 100.9% as of April 30, up from 100.3% a month earlier, according to a report about the Milliman Pension Buyout index. Milliman said the jump in competitive rates came from average accounting discount rates that increased by 45 basis points, while annuity purchase rates increased by 36 basis...

May 29, 2024
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24May

US. Pension Risk Transfer Market Sets Q1 Record

The first quarter of this year marked was the largest first quarter on record, as estimated $15 billion in pension risk transfers closed in the period. According to Legal & General Retirement America, the activity significantly outperformed the previous record of $6.3 billion in 2023 and nearly triple the 2022 amount of $5.3 billion. LGRA found that jumbo transactions continue to be the driving force behind the market’s strong performance, as two transactions that closed in Q1 totaled $11 billion....

May 24, 2024
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21May

Nearly 40% of savers at risk of losing track of pensions

More than one fifth (22 per cent) of savers are unsure where their pensions are held, while a further 16 per cent don’t know, research from Hargreaves Lansdown has found. The survey found that just under two thirds (62 per cent) of people know where all their pensions are held, raising concerns that some savers could be putting their retirement at risk by losing track of their pension savings altogether. The problem lessened as savers get older, as 8 per cent...

May 21, 2024
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21May

Pension De-Risking with Lump Sum Windows

Pension plans are critical components of retirement security, yet they pose significant financial and operational risks to sponsoring organizations. The volatility of funding requirements, coupled with longevity and investment risks, compels companies to seek innovative de-risking strategies. Offering a temporary lump sum window to active employees over age 59½, as facilitated by the Miners Act of 2019, has emerged as a strategic tool for de-risking pension plans. Background The Pension Protection Act of 2006 introduced the concept of phased retirement whereby pension...

May 21, 2024
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20May

US. New York City Retirement Funds Sue Fox For “Disregarding Defamation Risk” In Election Coverage

A group of New York City pension funds, along with others from the state of Oregon, have sued Fox Corp. and its officers and directors for “consciously disregarding defamation risk.” Fox News 2020 election coverage promoted “political narratives without regard for whether the underlying factual assertions were true or based on sources worthy of credit,” opening the company to litigation. “The board of directors of a Delaware-incorporated media company cannot be indifferent to the existential threat of broadcasting or publishing...

May 20, 2024
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