Managing a defined benefit pension plan today requires greater diligence than ever before. Let us show you what steps your company can take to overcome the business challenges of mitigating your pension risk.
Current pension risk landscape We understand the risks associated with pension plan liabilities and how they can affect your organization’s balance sheet, cash flow, and income statement. And more and more, we’re noticing that these liabilities are becoming harder for companies to manage in today’s market and regulatory environment. That’s why organizations like yours are taking concrete steps to mitigate the risks associated with their pension liabilities.
De-risking strategies that are available to you
Your company can mitigate pension plan risk through a variety of strategies, including:
Traditional asset allocation
Partial risk transfers
Growing interest in annuity buyouts
Because of their favorable low risk and costs, interest in annuity buyouts has increased. In an annuity buyout, your company would purchase a group annuity contract from us, transferring some or all of its defined benefit plan’s obligations and related risks to the issuing MetLife insurance company.1 You would retain the plan design features and benefits that your participants are vested in.
Preparing to de-risk
Your company should actively prepare to reduce its plan risks so that opportunities are recognized and seized upon.
Quantify & evaluate
Examine all current plan costs and the financial impact that a risk reduction strategy may have on funded status, earnings volatility, and ongoing expenses.
Interpret the plan's economic liability — or the cost to settle the liability — and the accounting impacts of such a strategy.
Secure the necessary internal approvals for action.
Keep an eye on market returns and interest rates to identify the right time to implement your risk reduction strategy.
Roadmap to Transferring Pension Benefits
Identify the steps necessary to be properly prepared by downloading our Roadmap to Transferring Pension Benefits brochure.