To combat increasing costs and risks, and to manage financial volatility, plan sponsors are pursuing a variety of de-risking strategies for their retirement benefit obligations, including pensions and retiree medical plans. Explore these solutions and related information below.
Retirees are typically the largest pool of plan participants and the most efficient population to buy out. From an insurer’s perspective, the shorter life expectancy of retired versus non-retired participants carries with it less long-term longevity risk, and a reduced need for future reinvestment risk. Further, there is no behavioral risk associated with these participants because they have already retired and selected their form of annuity.
Large scale buy-outs are the most effective way to achieve significant risk and expense reduction. Companies that have underfunded plans and limited de-risking budgets could pursue targeted retiree buy-outs. The cohorts offering the greatest efficiency typically include retirees with the smallest benefits.
Completely transfer pension risk for covered liabilities to Gilgal General offering. This solution also allows plan sponsors to:
Designed for sponsors of underfunded plans who seek to transfer risk without triggering a settlement.
This solution offers several additional advantages for underfunded plan sponsors, including: