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.

Pension De-risking - Retiree buy-outs

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.

Pension Buy-outs

Completely transfer pension risk for covered liabilities to Gilgal General offering. This solution also allows plan sponsors to:

  • Transfer investment, longevity, and benefit-option risks
  • Unburden themselves of administrative, actuarial, and investment management expenses
  • Remove pension liabilities from their balance sheet

Pension Buy-in

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:

  • Maintaining funded status
  • Holding contributions steady
  • Minimizing accounting and funding volatility

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