The higher the annuity credited rate (interest rate) for a pension risk transfer (PRT), the more interest an insurer would earn and the less money it needs today in order to guarantee the monthly benefit, but the lower the interest rate, the less interest it would earn and the more money it needs today, explains Mark Unhoch, with October Three.
Looking at the hits company balance sheets take from a pension risk transfer (PRT) to terminate a defined benefit (DB) plan, may cause plan sponsors to change course.
In 2018, single premium buy-out product sales peaked at $26 billion, more than 14% higher than 2017, according to LIMRA Secure Retirement Institute’s quarterly U.S. Group Annuity Risk Transfer Survey.
Clients with defined benefit plans that are currently enjoying a bump in funded status may want to act soon to lock in those gains while market conditions remain favorable.
As part of the PRT agreement, Prudential will assume the responsibility for paying pension benefits to about 23,000 International Paper retirees.
PLANADVISER interviewed a spokesperson for a large group of Verizon retirees back in 2015, shortly following their defeat in appellate court in a case challenging the merits of pension risk transfers; we catch back up with Jack Cohen to talk shop and ask, how have things been going post annuitization?