MetLife Retirement & Income Solutions

2023 PRT Poll Infographic

Mar 28, 2024

How the Current Market Environment is Impacting Pension De-Risking

For over 20 years, MetLife has been tracking pension risk management trends and developments. MetLife, as a market leader, is deeply invested in understanding the factors contributing to the record number of pension risk transfer transactions.

As defined benefit (DB) pension plan management becomes more difficult and costly in today’s challenging market environment, most companies are evaluating the long-term viability of maintaining their DB plan. Despite their decline in popularity, DB plans must continue to provide retirement security for millions of retirees for many years to come.

To keep their benefit promises, many companies are transferring their pension plan obligations to an insurer. While there is a range of de-risking strategies available to pension plan sponsors, a group annuity contract is the most effective way to fully transfer pension risk.

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Our latest poll uncovers a number of interesting findings among DB plan sponsors with de-risking goals, including:

9 out 10 plan sponsors weighing their DB plans

Plan sponsors (94%) say that their company is weighing their defined benefit pension plan's value against the cost of the benefit.

The high level of market activity will remain strong for the foreseeable future — according to the record-setting pension risk transfer sales in 2022.

Macroeconomic forces are continuing to drive de-risking:

When asked about the primary catalysts for initiating a pension risk transfer to an insurer, plan sponsors point to several market forces that are driving them to de-risk. These include inflation, market volatility, rising interest rates, and recessionary concerns. Other catalysts include an increase in the volume of retirees and favorable annuity buyout pricing.

Want more insights from the 2023 Pension Risk Transfer Poll?

Over a Century of Pension Risk Transfers

Since 1921, MetLife has worked with companies on their de-risking journey while providing retirees financial security.