If your DB pension plan is causing you too many challenges, you may benefit from a new approach to managing your pension risk.
Think of your DB plan as an underperforming division of your company – what would you do? You would either put it into run-off or you would divest it.
In the pension de-risking world, putting a plan into run-off is like using a liability driven investment (LDI) solution as you maintain the pension plan until it finishes paying your plan members. Divesting your plan is like buying an annuity buy-out or an annuity buy-in, which transfers the liabilities (and the risk) to an insurance company.
The benefits of de-risking can result in getting your pension plan back to good health:
Many plan sponsors are using innovative de-risking solutions.