Pension risk transfer and management
Extensive pension risk transfer management
Setting glide paths and de-risk levels
Integrating risk management with funding improvement
Diversified growth portfolio construction
Pension risk transfer strategy and execution
- Cashouts (active and vested terminated)
- Plan termination
Plan terminations on the rise
Potential advantages of a robust platform for pension risk transfer
While your defined benefit (DB) plan may now be closed to new employees, it still represents a significant obligation for your company to manage. Economic factors are also driving up demand for annuity transactions and the annuity marketplace can be hampered by long execution timelines and a lack of price transparency.
As a plan sponsor, you require robust information on the financial position of your company’s pension plan, an understanding of how key financial metrics are developing over time, and values-customized pricing information. This information must be accurate, up to date, and easily accessible.
At Mercer, we offer an established platform that provides greater price transparency to the group and annuity market. Called the Mercer Pension Risk Exchange™, it supports you through each step of the annuity placement process for plan terminations, buyouts, and buy-ins. Potential benefits include:
- Access to regular pricing from insurers helping to assess the true market price of a deal.
- Ability to execute a deal. Deals are executed in a more competitive price environment and shorter time frame than currently possible.
- Preparation of data and documents. By preparing documents for fast execution, we advise on target price levels and plan metrics to monitor and establish triggers for taking action.
- An online and mobile solution allowing sponsors and trustees access to valuable information anywhere, anytime.
Pension risk transfer - is it right for your defined benefit plan?
Pension risk transfer activity has experienced robust growth over the past few years. At Mercer, we’ve found that companies are changing defined benefit funding and risk strategies due to:
- Increasing Pension Benefit Guaranty Corporation (PBGC) premiums
- Capital market conditions
- Operational complexities
As a plan sponsor, you may feel it is the right time to reduce or eliminate your pension funding shortfalls. We may be able to help.
We will work with you to better understand your unique financial implications, the impact of your pension journey, and the ideal conditions for launching new activities. We believe engaging the insurer market early will help clarify the potential outcomes and sensitivities.
Market and plan dynamics will impact relative pricing. To efficiently execute when the transaction is most compelling, we help you articulate the business case and work through readiness steps in advance.
We’re ready to help with your pension risk transfer strategy.
Getting started is simple. Set up a free consultation to receive more information.
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