New tax brackets, mortality tables, volatile asset values, PBGC premiums, and continued low interest rates require updated analyses of a DB pension plan’s funded status to consider the impact on:

  • Termination cash costs: lump sums and SPGAs (annuities)
  • Projected plan contributions
  • Plan termination and insured de-risking possibilities
  • Pension debt refinancing

Participants and the Election Process

Lump sum activity from defined benefit pension plans is up over the past several years and is likely to continue with increasing plan terminations and lump sum windows.

Insured De-Risking Glide Path

It doesn’t have to be done all at once. Buyouts can be structured in many ways. Strategies can be implemented over time and partial buyouts are common. Insured Pension De-Risking and an Insured De-Risking Glide Path are ways to make real progress toward the goal of sunsetting and terminating frozen defined benefit pension plans.

Continued market gyrations point out the reasons plans de-risk

Rising PBGC premiums in particular make it an important time to reassess where plans are vis-à-vis plan sponsor strategies for sunsetting obsolete plans. Re-financing pension debt in such a low interest rate environment also makes decision makers look closely at plan termination, especially as we demonstrate how to do so over time.

RJ’s PRT Group and CES-CREWS

The Raymond James Pension Risk Transfer (PRT) Group brings a national presence with highly experienced advisers in your area. CES-CREWS systems and consultants bring what’s needed to complement these advisers and provide proactive results to plan sponsors.

CESBoston.com

CES is an independent organization and is not affiliated with Raymond James & Associates, Inc. or Raymond James Financial Services, Inc.
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