Firms Offer Pension Risk Transfer Advisory Services

Deloitte and Penbridge Advisors have established a strategic alliance to provide sponsors of U.S. defined benefit pension plans with pension risk transfer (PRT) advisory services.

According to Steve Keating, co-founder and principal of Penbridge Advisors, the collaborative adviser offering will deliver highly coordinated advice at each step of the PRT transaction process.

“By combining the complementary, deep PRT experience of our two organizations, the alliance of Penbridge Advisors and Deloitte is well positioned to help plan sponsors objectively address whether and how to pursue PRT,” says Jason Flynn, principal, Deloitte Consulting LLP and national leader of Deloitte’s human capital rewards practice, based in New York. Flynn notes that about $100 billion of corporate pension liabilities was transferred to insurers in the last 30 years, but that a significant portion of the remaining $3 trillion in pension plans is expected to be transferred at a much faster pace over the next five to 10 years.

The alliance coordinates advisory responsibilities as follows:

  • Penbridge Advisors primarily helps plan sponsors evaluate the cost-effectiveness of annuity buyouts relative to other pension de-risking strategies. Its services include PRT pricing and underwriting assessments, executive and board education, ongoing monitoring of buy-out pricing, and the evaluation and comparison of various insurance products and other de-risking alternatives such as lump sum payouts and liability-driven investing solutions.
  • Deloitte works closely with plan sponsors throughout the annuity placement process, providing comprehensive implementation support. Its services include assistance to plan sponsors with data analysis and cleansing; lump sum payment solicitations; preparation and distribution of annuity provider RFPs and RFIs; analysis of insurers and their offerings; competitive bidding process outsourcing; finalization of annuity contracts and data reconciliation; transition of administration responsibilities; and participant education and communication.

Brad Howard, a senior manager at Deloitte and leader in the firm’s PRT practice, says the combined offering should be a compelling option for plan sponsors of all sizes. 

Deloitte provides a broad range of consulting capabilities across human capital, strategy, operations, innovation and technology.

Penbridge Advisors provides pension plans with information and advisory services on the U.S. pension risk transfer (PRT) market and products. Penbridge provides free access to the industry’s only PRT database, currently used by more than 300 plan sponsors and advisory firms. More information about this database can be found here.