The defined benefit termination program provides resources, education and actuarial consulting to help financial professionals and their clients walk through the key steps for shutting down a plan, including:
- Development of a termination strategy by evaluating cost, funding strategies and the impact of asset allocation;
- Effective execution of a Dynamic Asset Allocation Strategy;
- Administration of the plan termination process; and
- Final risk transfer—distribution of assets to settle obligations.
Principal also released a white paper in two parts titled “Best Practices for Executing a Termination Strategy; Winding Down Your Hard-Frozen Defined Benefit Plan.” The first part offers best practices for developing a formalized defined benefit plan exit strategy. Part two, the newer paper in the series, offers best practices for building a termination strategy all the way to the final distribution of participant assets.