Verizon Announces $7.5 Billion Pension Settlement

Size: px
Start display at page:

Download "Verizon Announces $7.5 Billion Pension Settlement"

Transcription

1 Consulting Retirement Pension Settlement Trend Accelerates with Verizon Annuity Purchase Insights Into the Evolving Pension Transfer Environment October 2012

2 Verizon Announces $7.5 Billion Pension Settlement On October 17, 2012, Verizon Communications Inc. (Verizon) announced a $7.5 billion pension settlement for management retirees and beneficiaries. This action involves the purchase of a group annuity contract from Prudential Insurance Company of America (Prudential) to cover approximately 41,000 retirees and beneficiaries. The transaction is expected to close in December of With this announcement, Verizon adds to the growing trend of pension transfer or settlement actions among major employers. Other significant actions include those announced by Ford Motor Company (Ford) and General Motors (GM) earlier this year. However, unlike other recent actions, including those by Ford and GM, Verizon is not offering participants a lump sum payment option. Pension benefits for all affected retirees and beneficiaries will be transferred to Prudential without any changes to benefits. The $7.5 billion announced by Verizon represents the Projected Benefit Obligation (PBO) currently carried on its balance sheet for the portion of the obligation being settled. Verizon s 8-K filing noted cash contributions totaling $2.5 billion in connection with the transaction. During Verizon's third quarter 2012 earnings call, the company did not discuss the estimated accounting impact of the transaction, including any settlement charge or ongoing earnings impact. Other Plan Sponsors are Taking Bold Steps The size of pension settlement actions announced in 2012 has redefined the market. In the U.S., the amount of pension liabilities annuitized in recent years has not exceeded $1 billion per year, and no single transaction has exceeded $1 billion since the 1980s. The transactions by Verizon ($7.5 billion) and GM (expected to be a large portion of the $26 billion in liabilities it intends to settle) are an order of magnitude larger than this. In addition to the actions described above, dozens of U.S. pension plan sponsors have implemented lump sum windows for terminated vested employees in order to shrink their pension plans. Others have taken advantage of ultra-low borrowing costs to finance large pension contributions. Some plan sponsors are considering other alternatives for funding pension deficits, such as making non-cash pension contributions. For example, on October 19, 2012, AT&T Inc. announced that it intends to contribute a $9.5 billion preferred equity interest in its AT&T Mobility unit to significantly improve the funding of its pension plans. After years of watching their pension deficits swell due to falling interest rates and lagging equity returns, plan sponsors have unleashed a wide array of bold measures to gain control of this problem. This Aon Hewitt report includes an overview of the actions announced by Verizon, Ford, and GM. We have also included discussion of important considerations for pension settlement and other financing strategies. Please note that all information summarized in this document regarding specific pension settlement programs is based on publicly available information. Aon Hewitt 1

3 Comparison of Major 2012 Pension Settlement Actions As a review, the following provides a side-by-side comparison of this year s major pension settlement actions from public disclosures. Ford GM Verizon Announcement Date April 27, 2012 June 1, 2012 October 17, 2012 Participants Affected 90, ,000 41,000 Eligible U.S. salaried retirees and U.S. salaried former employees Current retirees and beneficiaries (about 42,000 are lump sum eligible) Management retirees who began receiving payments before January 1, 2010 Settlement Approach Lump sums Lump sums and annuity purchase Annuity purchase Insurance Companies Involved None Prudential Prudential Approximate Amount to be Settled Approximate % of Total Pension Liability Settled 1 Up to $18 billion $26 billion $7.5 billion Depends on actual lump sum election percentage Some to be settled via lump sum and remainder to be settled via annuity purchase All settled via annuity purchase Up to 25% 20% 25% Cash and Financial Statement Impacts Bob Shanks Ford CFO, noted:... minimal impact on operating income... noncash special item charges... no impact to company cash.... From GM s June 1 announcement:... cash contribution... to effect these actions will be in the range of $3.5 to $4.5 billion... net special charges in the range of $2.5 to $3.5 billion ongoing annual impact to earnings will be approximately $200 million unfavorable due to a decrease in pension income. From Verizon 8-K disclosure on October 17: Verizon currently intends to contribute... $2.5 billion to the Plan in connection with the transaction.... [Aon Hewitt Note: Verizon currently uses mark-tomarket pension accounting.] 1 Amount to be settled as a percentage of total 2011 year-end pension benefit obligation from company 10-K filing. Aon Hewitt 2

4 Important Considerations for Pension Settlements Our experience and discussions with plan sponsors suggest that the pension settlement environment will remain active. Analyzing plan settlements is a logical extension of implementing pension de-risking strategies, especially those including plan freezes or redesigns, and new investment strategies including glidepaths. Organizations with sizable legacy benefits and aging participant populations should actively consider transition end game strategies for their pension plans, including various pension settlement options. Below, we discuss issues that should be considered and reflected in such an analysis. Prevalent Settlement Options and Strategies The Verizon settlement approach differs from the Ford and GM strategies, in that lump sums are not being offered to plan participants. Benefits for all affected retirees and beneficiaries will be settled via an annuity purchase. In addition to Ford and GM, a number of other plan sponsors have also announced pension settlement programs involving lump sum offers. These lump sum windows often include only terminated vested participants, rather than retirees. Examples of companies offering such windows this year include Sears Holdings Corporation, NCR Corporation, and The New York Times Company. In determining whether to offer lump sums, and whether to settle retirees only or retirees and terminated vested participants, plan sponsors should consider the relative advantages of each strategy. Settlement Strategy Group annuity purchase for retirees Lump sum offer for retirees Lump sum offer and group annuity purchase for retirees Lump sum offer to terminated vested participants Key Advantages Sponsor controls amount settled Participant is not required to make an election, simplifying execution and eliminating adverse selection costs Lifetime income protection is preserved Purely voluntary for participants Retirees usually the largest portion of the inactive liability Sponsor controls amount settled Participant has choice of insured or uninsured settlement Purely voluntary for participants Terminated vested participants may prefer lump sum Typically most cost-effective way to settle deferred pensioner liabilities Little to no adverse selection cost Regulatory approval (e.g., private letter ruling) likely not needed Copyright Aon

5 Potential Adverse Selection Costs Any settlement strategy that offers employee choice creates potential adverse selection costs. For instance, when a choice of annuity or lump sum is offered, healthier participants will tend to prefer the annuity. The additional cost that the plan incurs over the life of those participants can be estimated using actuarial methods, as in the model developed and maintained by Aon Hewitt. In some cases, this cost will be significant. If so, the sponsor may decide to modify the choice being offered in order to control potential adverse selection costs. Insurance Industry Capacity $60 80B Per Year $5 Total Premium for Annuity Placements $30.0 $20.0+ Total Premium (billions) $4 $3 $2 $1 $0.6 $1.8 $2.7 $2.3 $0.8 $0.7 $0.9 $ Proj Year Source: Hewitt EnnisKnupp Global Institutional Annuity Market Update, as reported by insurance companies surveyed. The most recent survey included 10 significant U.S. insurers. Only a small percentage of U.S. life insurance companies are currently in the pension settlement business. As annuity purchase demand increases, new carriers are expected to enter the market to satisfy this demand. Smaller carriers with lower capacity levels may jointly underwrite business with other such carriers. Reinsurance companies interested in increasing their longevity exposure may also play a role in expanding industry capacity. Even in the wake of the Verizon and GM transactions, we believe market capacity will be available if more plan sponsors pursue annuity purchases as part of their pension settlement strategies. With $30 billion in expected premiums, 2012 is a landmark year for insured pension settlements in the U.S. But with over $2 trillion in estimated pension obligations in U.S. corporate defined benefit plans, we could see even greater activity in future years. Annual capacity among ten large insurers currently active in this market is estimated at $60-80 billion. Copyright Aon

6 Benefit Protection Available in Insured Settlement Solutions As plan sponsors and fiduciaries contemplate the impact of an annuity settlement on participants, benefit security is a primary concern. While the actual monthly benefit does not change when an insurer assumes responsibility for payment, the protections do change. Important due diligence about the financial health of the insurer(s), the structure of the annuity contract and the protections in the unlikely event of insolvency must be performed. Some plan sponsors hire an independent fiduciary to perform this analysis and to ensure that the participants' interests are being protected by an expert third-party. Plan sponsors are generally familiar with the nature of the security provided to benefits paid from a PBGCinsured pension plan. However, some may be less familiar when insured products are used. Below, we highlight two specific protections for insured products that merit particular consideration. Use of Insurance Company Separate Accounts The vast majority of annuity settlements are backed by the insurance company's general account. A separate account structure can also be used to insulate the underlying assets from an insurer s other policyholders and creditors. If the insurer becomes insolvent, insulated separate account assets are typically secure from general account obligations. More importantly, in an insolvency participants in those accounts have exclusive, first priority rights to those assets to cover their payments. In 1995, the Department of Labor issued Interpretive Bulletin No as guidance for plan sponsors to use when selecting a Safest Available Annuity provider. One of the criteria in the Bulletin is the structure of the annuity contract and guaranties supporting the annuities, such as the use of separate accounts. Each issuing state may have different rules about the development and operations of insulated separate accounts, so careful review is necessary. State Insurance Guaranty System When a plan sponsor enters into an insured pension settlement, participants benefits are no longer backed by Pension Benefit Guaranty Corporation (PBGC). Instead, these safeguards are replaced with the state insurance guaranty funds. These protections vary by state and are typically based on the annuitant s state of residence. Qualified annuity providers generally have A to AA credit quality ratings, and are subject to regulatory safeguards including Risk-Based Capital levels, statutory reserve standards, cash flow testing methods, and other rigorous requirements. In addition, they are backed by the state guaranty associations. Each state (and Puerto Rico and the District of Columbia) has a guaranty association, operating under individual state laws, to safeguard policyholders in the event of insurance company non-performance. In the event of insurer insolvency, participants benefits will generally be covered by the applicable state insurance guaranty first, and then any additional benefits beyond the guaranty coverage limit will be funded from the net assets of the insurer. An analysis 1 by the National Organization of Life & Health Insurance Guaranty Associations (NOLHGA) suggests that, even if an insurer fails, minimum net asset levels might typically produce 90% to 95% funding of insured benefits. NOLHGA found that the vast majority of policyholders have been made whole or nearly whole in past insolvencies, regardless of state guaranty limits. Additionally, the states have assisted distressed insurance companies prior to and during the insolvency process in an attempt to fully protect policyholder benefits. 1 NOLGHA Testimony for the record, Hearing Entitled Insurance Oversight and Legislative Proposals November 16, Copyright Aon

7 Financial and Investment Considerations Underlying these recent settlement transactions is the sponsor s desire to decrease their pension financial risk by shrinking the size of their pension plan. But when viewed through the lenses of accounting, cash, or even investments, this can become anything but straightforward. Here are just some of the issues that sponsors will need to understand as part of this process: Issue Considerations Observation Accounting costs Current interest rates Fully Loaded liability cost Preparing the investments for settlement Immediate recognition of a portion of unrecognized losses (and gains) when plan liabilities are settled may materially impact earnings and earnings-related or stock-related compensation. By settling now, plan sponsors may fear locking in higher liability and ultimate costs in today s ultra-low interest rate environment. In deciding whether annuities and lump sums are too expensive, sponsors should consider the full cost of providing pension benefits, including administrative and investment fees, PBGC premiums, and potential measurement changes (e.g., life expectancy improvements). Plans must manage large interest rate exposure while maintaining liquidity to support the transaction. Lump sum acceptance rate is a critical planning variable where applicable. For Verizon, the 2012 action will likely result in a different settlement charge than most other companies would have due to their 2010 adoption of mark to market pension accounting. Impact on ongoing pension expense and P&L will depend on a variety of factors including any additional funding and the mix of investments in the trust post-settlement. Sponsors may choose a phased approach to mitigate this risk as well as the impact of any accounting settlement charges described above. Aon Hewitt s modeling indicates that a typical fully loaded pension obligation is now 0.3% to 1.5% higher solely due to recent increases in PBGC premiums, making settlement actions more appealing. In-kind portfolios are often used in larger deals to minimize transaction risk to both sponsor and insurer. Copyright Aon

8 Administration and Communications In a typical retiree buyout program without lump sum solicitations, participants will not need to make any decisions or sign any forms. The insurer will simply assume responsibility for all future benefit payments for the specified retiree group. Most other large settlement programs this year have included a lump sum offer, which requires a great deal more effort from both the plan administrator and the participant. Regardless of the approach chosen, proper communication is critical to a successful outcome. Here are just a few of the issues administrators can expect to encounter: Issue Considerations Observation Communicating to annuitized participants Sponsors must communicate the change in source of payment and shift from PBGC to state insurance guaranty fund. Sponsors may provide additional background to help retirees understand why the change is occurring, as well as any changes to retiree medical coverage or ancillary pension benefits. Communicating a lump sum offer to inactive participants Administration Participants need unbiased information to understand the available options and make choices based on their own financial situation. Multiple forms may need to be completed properly, signed and notarized, and returned in a timely fashion. All aspects of administration must be transferred to insurer. Working with retirees, as well as locating and effectively communicating with former employees can take much more time and effort than pension administration for an ongoing steady state plan. Requires considerable preparation to ensure optional forms, QDROs, payment processes, and deductions are preserved. Compliance and Fiduciary Obligations Proper management of compliance and fiduciary risks begins with the proper assignment of responsibilities. All parties should understand the distinction between the settlor and fiduciary roles, and decisions should be made by the appropriately assigned authority. Issue Considerations Observation Compliance risk management Compliance issues include nondiscrimination testing and the potential need for a private letter ruling if, for example, a lump sum is being offered to retired participants. Early involvement of legal counsel in planning discussions is crucial. Settlor role Fiduciary role Settlor decisions are made by the sponsor, and include whether to terminate the plan, whether to offer lump sums, and to whom. Fiduciary decisions are made solely on behalf of plan participants, and include evaluating alternative safest available annuity providers. Starting with the settlor analysis allows the company to develop a strategy that balances all parties needs. Sponsor should maintain separation of settlor and fiduciary activities, including hiring a separate advisor to advise the plan on fiduciary matters. Copyright Aon

9 Appendix Overview of Specific Settlement Actions Copyright Aon

10 Recap of Ford Settlement Actions The charts below provide an overview of the Ford settlement action and the potential size of the settlement relative to the remaining liability for the Ford Motor Company General Retirement Plan. Liabilities and Participants Reported for Recent Plan Year Funding Target Liability (in $billions) Participant Count , ,962 Terminated Vested In Payment 65,962 33,038 Source: Data from Ford Motor Company General Retirement Plan Form 5500 for plan year ending December 31, 2011 (Department of Labor website). Updated numbers presented elsewhere in this document were disclosed by Ford on April 27, Ford Settlement Offer Lump Sums to Retirees and Terminated Participants What Lump sum offer to approximately 90,000 salaried retirees and terminated vested participants. Retirees and Terminated Vested When Series of election periods through 2012 and Why Allow additional choice and flexibility to inactive participants, and allow company to reduce volatility and administrative costs related to pensions. Potential lump sum settlement Copyright Aon

11 Recap of GM Settlement Actions The following provides a step-by-step overview of the steps GM is taking to complete its pension settlement transaction. Liabilities and Participants Reported for Recent Plan Year Funding Target Liability (in $billions) Participant Count ,547 29, ,310 Terminated 124,310 Vested In Payment 25.8 Source: Data from GM Salaried Retirement Plan Form 5500 for plan year ending September 30, 2011 (Department of Labor website). Updated numbers presented elsewhere in this document were disclosed by GM on June 1, Copyright Aon

12 GM s Transaction Steps Step 1 Offer Lump Sums Offer lump sum payments to 36% of the retiree and beneficiary population (about 42,000 participants). This is generally the group which retired on or after October 1, 1997 and before December 1, When Lump sum elections provided to eligible retirees and beneficiaries after the announcement, with a required return date of July 20, Terminated Vested Retirees Not Lump Sum Eligible Retirees Lump Sum Eligible Step 2 Split the Pension Plan Create a new plan for active and, presumably, terminated vested participants. When Late 2012 Lump Sum Distributions Terminated Vested Retirees to be Annuitized Step 3 Terminate and Purchase Annuities Terminate retiree/beneficiary plan for those participants not receiving a lump sum payment and buy annuities from Prudential. Lump Sum Distributions When By the end of 2012 Terminated Vested Annuity Purchases Copyright Aon

13 Recap of Verizon Settlement Actions Liabilities and Participants Reported for Recent Plan Year Funding Target Liability (in $billions) Participant Count ,310 57, ,901 Terminated Vested In Payment 26,109 Source: Data from Verizon Management Pension Plan Form 5500 for plan year ending December 31, 2011 (Department of Labor website). The figures shown above reflect the merger of several union plans into the Verizon Management Pension Plan during Updated numbers presented elsewhere in this document were disclosed by Verizon on October 17, Verizon Settlement Purchase Annuities for Retirees What $7.5 billion liability settlement from Prudential for employees retiring before January 1, When By the end of Terminated Vested Retirees to be Annuitized Retirees Not Being Annuitized Why Reduce volatility associated with pension plan, reduce administrative costs, and allow greater focus on core business. $7.5B liability settlement Copyright Aon

14 Contact Information For more information, please contact: Rick Jones Senior Partner and Leader of Retirement Consulting National Practices Eric Keener Partner and Chief Actuary Alan Parikh Associate Partner and Pension Risk Specialist About Aon Hewitt Aon Hewitt is the global leader in human capital consulting and outsourcing solutions. The company partners with organizations to solve their most complex benefits, talent and related financial challenges, and improve business performance. Aon Hewitt designs, implements, communicates and administers a wide range of human capital, retirement, investment management, health care, compensation and talent management strategies. With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients and their employees. For more information on Aon Hewitt, please visit Copyright Aon

GM Pension Settlement Actions

GM Pension Settlement Actions Consulting Retirement GM Pension Settlement Actions And Considerations for Plan Sponsors June 2012 On June 1, 2012, General Motors Co. (GM) announced a program that will settle approximately $26 billion

More information

1. Why is GM making these changes to the Salaried Retirement Program (SRP)?

1. Why is GM making these changes to the Salaried Retirement Program (SRP)? GMRetiree.com 060112 1. Why is GM making these changes to the Salaried Retirement Program (SRP)? GM s announced changes to the Salaried Retirement Program (SRP) underscore the company s commitment to retirees

More information

De-risking Alternatives for Plan Sponsors Compliance Requirements. April 16, 2015 Presented by: Michael Falk, Erin Kartheiser, and Steve Flores

De-risking Alternatives for Plan Sponsors Compliance Requirements. April 16, 2015 Presented by: Michael Falk, Erin Kartheiser, and Steve Flores De-risking Alternatives for Plan Sponsors Compliance Requirements April 16, 2015 Presented by: Michael Falk, Erin Kartheiser, and Steve Flores Today s elunch Presenters Michael Falk Partner, Employee Benefits

More information

Pension Settlements Through Terminated Vested Lump Sum Windows

Pension Settlements Through Terminated Vested Lump Sum Windows Pension Settlements Through Terminated Vested Lump Sum Windows Insights into Plan Sponsor Experience February 2013 Retirement port 2013 Aon plc Document Title Sub-Title of Report Document Date Summary

More information

Pension. Presented by Frank Minter & Al Duscher

Pension. Presented by Frank Minter & Al Duscher Pension Presented by Frank Minter & Al Duscher DRIVING INTO THE FUTURE AND LOOKING IN THE REARVIEW MIRROR HELPFUL TO UNDERSTAND THE HISTORY OF HOW WE GOT TO WHERE WE ARE NOW WHAT HAS CHANGED? WHY IS ALU

More information

Pension De-Risking Strategies Latest Developments and Trends. June 30, 2015

Pension De-Risking Strategies Latest Developments and Trends. June 30, 2015 Pension De-Risking Strategies Latest Developments and Trends June 30, 2015 Speakers Contact Information Tonya Manning, FSA, EA, MAAA Chief Actuary, Wealth Practice tonya.manning@xerox.com Phil Parker,

More information

Written Testimony of Stephen A. Keating Co-Founder & Principal. Penbridge Advisors, LLC. ERISA Advisory Council. United States Department of Labor

Written Testimony of Stephen A. Keating Co-Founder & Principal. Penbridge Advisors, LLC. ERISA Advisory Council. United States Department of Labor Written Testimony of Stephen A. Keating Co-Founder & Principal Penbridge Advisors, LLC ERISA Advisory Council United States Department of Labor Hearing on Private Sector Pension De-Risking and Participant

More information

Participant Protections for Defined Benefit Plan Benefits: Benefit Security

Participant Protections for Defined Benefit Plan Benefits: Benefit Security TOPICS IN Pension risk management Participant Protections for Defined Benefit Plan Benefits: Benefit Security As persistent economic and related market factors continue to keep volatility front and center

More information

I. Introduction. II. Methods of Pension De-Risking

I. Introduction. II. Methods of Pension De-Risking TESTIMONY OF ROBERT S. NEWMAN Covington & Burling LLP ERISA Advisory Council United States Department of Labor Hearing on PRIVATE SECTOR PENSION DE-RISKING AND PARTICIPANT PROTECTIONS June 5, 2013 I. Introduction

More information

Annuity Market Quarterly Update

Annuity Market Quarterly Update Annuity Market Quarterly Update November 2010 2010 Aon Corporation Brief Description: Despite the rebound in the third quarter, many pension plans remain underfunded. On top of that, annuity interest rates

More information

Recent Trends In Pension Buyouts And Lump Sum Offers

Recent Trends In Pension Buyouts And Lump Sum Offers Portfolio Media. Inc. 860 Broadway, 6th Floor New York, NY 10003 www.law360.com Phone: +1 646 783 7100 Fax: +1 646 783 7161 customerservice@law360.com Recent Trends In Pension Buyouts And Lump Sum Offers

More information

Minimizing Conflicts within Complex Plan Transactions via an Independent Fiduciary

Minimizing Conflicts within Complex Plan Transactions via an Independent Fiduciary Minimizing Conflicts within Complex Plan Transactions via an Independent Fiduciary William E. Ryan III Managing Director & Chief Fiduciary Officer Evercore Trust Company, N.A. 1. A representative of the

More information

Executive Summary. Introduction

Executive Summary. Introduction 2013 ERISA Advisory Council Private Sector Pension De-risking and Participant Protections Testimony of John G. Ferreira Partner, Morgan, Lewis & Bockius LLP 1 Executive Summary In my view, there is no

More information

COMPARING GROUP ANNUITY CONTRACTS AND DEFINED BENEFIT PENSION PLANS

COMPARING GROUP ANNUITY CONTRACTS AND DEFINED BENEFIT PENSION PLANS COMPARING GROUP ANNUITY CONTRACTS AND DEFINED BENEFIT PENSION PLANS COMPARING GROUP ANNUITY CONTRACTS AND DEFINED BENEFIT PENSION PLANS Group annuity contracts play a vital role in protecting pension benefits.

More information

Pension De-risking Strategies and Issues

Pension De-risking Strategies and Issues Pension De-risking Strategies and Issues May 1, 2013 www.morganlewis.com Presenters: Craig A. Bitman John G. Ferreira Azeez Hayne Pension De-risking Significant pension settlement and de-risking activities

More information

Global Institutional Annuity Market Update

Global Institutional Annuity Market Update Global Institutional Annuity Market Update Liability De-Risking / Plan Terminations Year-End 2012 Hewitt EnnisKnupp, An Aon Company 2013 Aon Corporation Brief Description: This newsletter reviews the international

More information

Lump Sum Payments for Terminated Vested Participants. 2012 Retirement Webinar Series March 8, 2012

Lump Sum Payments for Terminated Vested Participants. 2012 Retirement Webinar Series March 8, 2012 Lump Sum Payments for Terminated Vested Participants 2012 Retirement Webinar Series March 8, 2012 Lump Sum Payments for Terminated Vested Participants Today s Participants Joe McDonald Aon Hewitt Byron

More information

$29 Billion of payments over 50 years $17 Billion of Liability (calculation of assets needed now to pay benefits) (to calculate: need investment

$29 Billion of payments over 50 years $17 Billion of Liability (calculation of assets needed now to pay benefits) (to calculate: need investment $29 Billion of payments over 50 years $17 Billion of Liability (calculation of assets needed now to pay benefits) (to calculate: need investment return and life expectancy WHAT HAS HAPPENED SINCE 2007?

More information

Pension Derisking: Distributing Annuity Contracts After Lee v. Verizon

Pension Derisking: Distributing Annuity Contracts After Lee v. Verizon Pension Derisking: Distributing Annuity Contracts After Lee v. Verizon ALI CLE Pension, Profit-Sharing, Welfare, and Other Compensation Plans San Francisco, CA April 3, 2014 Rosina B. Barker Ivins, Phillips

More information

Will They Take the Money and Run?

Will They Take the Money and Run? Will They Take the Money and Run? A Perspective on Pension Lump Sum Cash-Outs November 2012 Lockton Retirement Services The tide is changing in favor of personal financial conservatism. Gone are the days

More information

CONSIDERING GETTING OUT OF THE PENSION BUSINESS?

CONSIDERING GETTING OUT OF THE PENSION BUSINESS? CONSIDERING GETTING OUT OF THE PENSION BUSINESS? Annuities? Lump Sums? Terminations? Questions you need to ask and answer before you pull the trigger November 1, 2012 David Oaten, CEO, Pacific Global Advisors

More information

Pensions and the Future of Retained Risk

Pensions and the Future of Retained Risk Institutional Investor Corporate Financial Executive Summit Pensions and the Future of Retained Risk June 19, 2013 Glenn O Brien Managing Director, Pension Risk Transfer Prudential Retirement 0246029-00001-00

More information

Major Changes to Mortality Assumptions in 2014

Major Changes to Mortality Assumptions in 2014 Major Changes to Mortality Assumptions in 2014 The Financial and Strategic Implications for Pension Plan Sponsors February 2014 2014 Aon plc Aon Hewitt, the global talent, retirement and health solutions

More information

CREATING A CLEAR PATH TO PENSION PLAN DE-RISKING PENSION RISK TRANSFER STRATEGIES

CREATING A CLEAR PATH TO PENSION PLAN DE-RISKING PENSION RISK TRANSFER STRATEGIES CREATING A CLEAR PATH TO PENSION PLAN DE-RISKING PENSION RISK TRANSFER STRATEGIES STRENGTH STABILITY & INNOVATION DEFINED BENEFIT PLAN SPONSORS FACE UNPRECEDENTED RISK As plan sponsors look down the path

More information

FIDUCIARY S ROLE in the TERMINATION

FIDUCIARY S ROLE in the TERMINATION The FIDUCIARY S ROLE in the TERMINATION of Single Employer DEFINED BENEFIT PLANS: A PRACTICAL GUIDE INTRODUCTION: WHY YOU SHOULD READ THIS ARTICLE De-risking their defined benefit pension plans has become

More information

Terminated Vested Cashouts Overcoming Common

Terminated Vested Cashouts Overcoming Common Terminated Vested Cashouts Overcoming Common Misconceptions Terminated Vested Cashouts Overcoming Common Misconceptions In the past few years, a growing number of defined benefit pension plans have been

More information

Global Institutional Annuity Market Update

Global Institutional Annuity Market Update Global Institutional Annuity Market Update Liability De-Risking/Plan Terminations Second Quarter 2014 Hewitt EnnisKnupp, An Aon Company 2014 Aon plc Brief Description: This report reviews the international

More information

What to Consider When Faced With the Pension Election Decision

What to Consider When Faced With the Pension Election Decision PENSION ELECTION Key Information About Your Pension (Optional Forms of Benefits) Pension Math and Factors to Consider Pension Maximization What Happens if Your Company Files for Bankruptcy and Your Company

More information

In recent years, plan sponsors have been focusing

In recent years, plan sponsors have been focusing November 2012 By Elizabeth Thomas Dold and David N. Levine A Look at Retiree Cashouts as the New De-Risking Strategy Elizabeth Thomas Dold and David N. Levine are Principals at Groom Law Group, Chartered

More information

Annual Funding Notice For TOTAL Finance USA, Inc. Cash Balance Pension Plan

Annual Funding Notice For TOTAL Finance USA, Inc. Cash Balance Pension Plan Annual Funding Notice For TOTAL Finance USA, Inc. Cash Balance Pension Plan Introduction This notice includes important information about the funding status of your pension plan ( the Plan ) and general

More information

Lump Sum Term-Vested Payouts Is Now the Time?

Lump Sum Term-Vested Payouts Is Now the Time? Institutional Group Lump Sum Term-Vested Payouts Is Now the Time? After a difficult five years overseeing pensions, plan sponsors in the U.S. and Canada are finding pension funding levels the healthiest

More information

POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 1012 Part 3 E M Additional Activities and Common Disclosures of a Business POSTRETIREMENT BENEFITS OTHER THAN PENSIONS Explain the differences in accounting for pensions and postretirement benefits other

More information

STATEMENT FOR THE RECORD FROM THE AMERICAN COUNCIL OF LIFE INSURERS BEFORE THE 2012 ERISA ADVISORY COUNCIL

STATEMENT FOR THE RECORD FROM THE AMERICAN COUNCIL OF LIFE INSURERS BEFORE THE 2012 ERISA ADVISORY COUNCIL STATEMENT FOR THE RECORD FROM THE AMERICAN COUNCIL OF LIFE INSURERS BEFORE THE 2012 ERISA ADVISORY COUNCIL EXAMINING INCOME REPLACEMENT DURING RETIREMENT IN A DEFINED CONTRIBUTION PLAN SYSTEM WEDNESDAY

More information

MAP-21 SUPPLEMENT TO ANNUAL FUNDING NOTICE

MAP-21 SUPPLEMENT TO ANNUAL FUNDING NOTICE MAP-21 SUPPLEMENT TO ANNUAL FUNDING NOTICE OF THE ACADEMY OF NATURAL SCIENCES OF PHILADELPHIA PENSION PLAN FOR PLAN YEAR BEGINNING JANUARY 1, 2013 AND ENDING DECEMBER 31, 2013 ( Plan Year ) This is a temporary

More information

PRIVATE PENSIONS. Participants Need Better Information When Offered Lump Sums That Replace Their Lifetime Benefits

PRIVATE PENSIONS. Participants Need Better Information When Offered Lump Sums That Replace Their Lifetime Benefits United States Government Accountability Office Report to the Ranking Member, Committee on Ways and Means, House of Representatives January 2015 PRIVATE PENSIONS Participants Need Better Information When

More information

Immediate Annuities. Reno J. Frazzitta Investment Advisor Representative 877-909-7233 www.thesmartmoneyguy.com

Immediate Annuities. Reno J. Frazzitta Investment Advisor Representative 877-909-7233 www.thesmartmoneyguy.com Reno J. Frazzitta Investment Advisor Representative 877-909-7233 www.thesmartmoneyguy.com Immediate Annuities Page 1 of 7, see disclaimer on final page Immediate Annuities What is an immediate annuity?

More information

RETIREMENT PLAN STRATEGIES

RETIREMENT PLAN STRATEGIES 0213702 For Plan Sponsor and Advisor Use - Public Use Permitted. RETIREMENT PLAN STRATEGIES De-risking pensions emerging opportunity through lump sum cash-outs under the Pension Protection Act of 2006

More information

Evaluating Retiree Cash-out Windows

Evaluating Retiree Cash-out Windows Evaluating Retiree Cash-out Windows Recent IRS Private Letter Rulings confirm that qualified pension plans that are not terminating can offer participants who are currently receiving annuity payments a

More information

Vested Termination Lump Sum Window Right for your company? September 25, 2014

Vested Termination Lump Sum Window Right for your company? September 25, 2014 Vested Termination Lump Sum Window Right for your company? September 25, 2014 Agenda Background Considerations Administration Communications Wrap Up Q&A 2 Speakers Dean Aloise, ASA, FCA, EA, MAAA Managing

More information

Title 24-A: MAINE INSURANCE CODE

Title 24-A: MAINE INSURANCE CODE Title 24-A: MAINE INSURANCE CODE Chapter 52: MAINE EMPLOYERS' MUTUAL INSURANCE COMPANY HEADING: PL 1991, c. 615, Pt. D, 1 (new) Table of Contents Section 3701. PURPOSE... 3 Section 3702. DEFINITIONS...

More information

Investment opportunities Locking the potential of future benefits

Investment opportunities Locking the potential of future benefits Investment opportunities Locking the potential of future benefits Ivo van der Veen Senior Manager Risk Services Deloitte Sjoerd Kampen Junior Manager Risk Services Deloitte 72 The last couple of years

More information

Captive Reinsurance. An Innovative Approach to U.S. Employee Benefits

Captive Reinsurance. An Innovative Approach to U.S. Employee Benefits Captive Reinsurance An Innovative Approach to U.S. Employee Benefits The Prudential Insurance Company of America 751 Broad Street, Newark, NJ 0221709-00002-00 Introduction An important corporate function

More information

Using liability-driven investing to derisk corporate pension plans

Using liability-driven investing to derisk corporate pension plans EATON VANCE NOVEMBER 2015 TIMELY THINKING Using liability-driven investing to derisk corporate pension plans SUMMARY Defined benefit (DB) pension funding ratios remain near decade lows. Underfunded pension

More information

1.0 Structure of the Investment. Financial Services Commission of Ontario Commission des services financiers de l Ontario. Investment Guidance Notes

1.0 Structure of the Investment. Financial Services Commission of Ontario Commission des services financiers de l Ontario. Investment Guidance Notes Financial Services Commission of Ontario Commission des services financiers de l Ontario SECTION: INDEX NO.: TITLE: APPROVED BY: PUBLISHED: EFFECTIVE DATE: Investment Guidance Notes IGN-001 Buy-In Annuities

More information

Global Institutional Annuity Market Update

Global Institutional Annuity Market Update Global Institutional Annuity Market Update Liability De-Risking / Plan Terminations Mid-Year 2012 Hewitt EnnisKnupp, An Aon Company 2012 Aon Corporation Brief Description: This newsletter reviews the international

More information

PENN TREATY NETWORK AMERICA INSURANCE COMPANY AMERICAN NETWORK INSURANCE COMPANY FREQUENTLY ASKED QUESTIONS

PENN TREATY NETWORK AMERICA INSURANCE COMPANY AMERICAN NETWORK INSURANCE COMPANY FREQUENTLY ASKED QUESTIONS Revised 1/8/10 STATUS OF PTNA AND ANIC PENN TREATY NETWORK AMERICA INSURANCE COMPANY AMERICAN NETWORK INSURANCE COMPANY FREQUENTLY ASKED QUESTIONS 1. Are Penn Treaty Network America Insurance Company (PTNA)

More information

Global Institutional Annuity Market Update

Global Institutional Annuity Market Update Global Institutional Annuity Market Update Liability De-Risking / Plan Terminations Fourth Quarter 2011 Hewitt EnnisKnupp, An Aon Company 2012 Aon Corporation Brief Description: This newsletter reviews

More information

SOA 2011 Annual Meeting & Exhibit Oct. 16-19, 2011. Session 118 OF, Plan Termination Seminar: Session 4 Getting It Done

SOA 2011 Annual Meeting & Exhibit Oct. 16-19, 2011. Session 118 OF, Plan Termination Seminar: Session 4 Getting It Done SOA 2011 Annual Meeting & Exhibit Oct. 16-19, 2011 Session 118 OF, Plan Termination Seminar: Session 4 Getting It Done Moderator: Brian C. Donohue, FSA, EA, FCA, MAAA Presenters: Karen Ambrose Monica L.

More information

Managing Financial Risk in Retirement and Benefits Programs

Managing Financial Risk in Retirement and Benefits Programs 2014 Managing Financial Risk in Retirement and Benefits Programs Translating Awareness into Action A report prepared by CFO Research in collaboration with Prudential Financial, Inc. Contents Research Sponsor

More information

Testimony of William Kadereit President, National Retiree Legislative Network. ERISA Advisory Council United States Department of Labor

Testimony of William Kadereit President, National Retiree Legislative Network. ERISA Advisory Council United States Department of Labor Introduction Testimony of William Kadereit President, National Retiree Legislative Network ERISA Advisory Council United States Department of Labor Hearing on Model Notices and Disclosures For Pension

More information

2. What kinds of insurance policies are covered by the Texas Guaranty Association?

2. What kinds of insurance policies are covered by the Texas Guaranty Association? The following information is intended to answer common questions about the Texas Life & Health Insurance Guaranty Association (the Texas Guaranty Association ) and the coverage it provides to policyholders

More information

Lifetime Income Solutions for DC Participants

Lifetime Income Solutions for DC Participants Lifetime Income Solutions for DC Participants Federal Regulators Offer New, Practical Guidance for Plan Sponsors 80% of participants responded that a guaranteed monthly payout benefit is a must have in

More information

SUPPLEMENT TO ANNUAL FUNDING NOTICE OF MAYO PENSION PLAN FOR PLAN YEAR BEGINNING JANUARY 1, 2015 AND ENDING DECEMBER 31, 2015 ( Plan Year )

SUPPLEMENT TO ANNUAL FUNDING NOTICE OF MAYO PENSION PLAN FOR PLAN YEAR BEGINNING JANUARY 1, 2015 AND ENDING DECEMBER 31, 2015 ( Plan Year ) SUPPLEMENT TO ANNUAL FUNDING NOTICE OF MAYO PENSION PLAN FOR PLAN YEAR BEGINNING JANUARY 1, 2015 AND ENDING DECEMBER 31, 2015 ( Plan Year ) This is a temporary supplement to your annual funding notice.

More information

Freezing Defined Benefit Plans

Freezing Defined Benefit Plans View the online version at http://us.practicallaw.com/6-502-3611 Freezing Defined Benefit Plans DAVID N. LEVINE AND LARS C. GOLUMBIC, GROOM LAW GROUP, CHARTERED This Practice Note provides a basic overview

More information

Defined Benefit Retirement Plan. Summary Plan Description

Defined Benefit Retirement Plan. Summary Plan Description Defined Benefit Retirement Plan Summary Plan Description This booklet is not the Plan document, but only a summary of its main provisions and not every limitation or detail of the Plan is included. Every

More information

ANNUAL FUNDING NOTICE For The Johns Hopkins University Support Staff Pension Plan. Introduction

ANNUAL FUNDING NOTICE For The Johns Hopkins University Support Staff Pension Plan. Introduction Human Resources Benefits Service Center Johns Hopkins at Eastern 1101 E. 33 rd Street, Suite D100 Baltimore, MD 21218-2696 410-516-2000 / Fax 443-997-5820 ANNUAL FUNDING NOTICE For The Johns Hopkins University

More information

For a complete list of EBSA publications, call toll-free: 1-866-444-EBSA (3272) This material will be made available in alternate format upon request:

For a complete list of EBSA publications, call toll-free: 1-866-444-EBSA (3272) This material will be made available in alternate format upon request: This publication has been developed by the U.S. Department of Labor, Employee Benefits Security Administration. It is available on the Internet at: www.dol.gov/ebsa For a complete list of EBSA publications,

More information

June 3, 2013. Submitted via email to reg.comments@pbgc.gov

June 3, 2013. Submitted via email to reg.comments@pbgc.gov Submitted via email to reg.comments@pbgc.gov Regulatory Affairs Group Office of the General Counsel Pension Benefit Guaranty Corporation 1200 K Street NW Washington, DC 20005-4026 Dear Sir or Madam, Subject:

More information

PRUDENTIAL AS A STRONG ANNUITY PROVIDER UNDERSTANDING HOW PRUDENTIAL MEETS STRICT GOVERNMENT GUIDELINES. Footnote

PRUDENTIAL AS A STRONG ANNUITY PROVIDER UNDERSTANDING HOW PRUDENTIAL MEETS STRICT GOVERNMENT GUIDELINES. Footnote PRUDENTIAL AS A STRONG ANNUITY PROVIDER UNDERSTANDING HOW PRUDENTIAL MEETS STRICT GOVERNMENT GUIDELINES Footnote A DETERMINING THE SAFEST AVAILABLE ANNUITY PROVIDER Group annuity contracts are often purchased

More information

Retirement Plan Participants and/or Beneficiaries. Harvard Human Resources, Benefits. Annual Funding Notice Harvard University Retirement Plan

Retirement Plan Participants and/or Beneficiaries. Harvard Human Resources, Benefits. Annual Funding Notice Harvard University Retirement Plan Richard A. and Susan F. Smith Campus Center 1350 Massachusetts Avenue Cambridge, MA 02138 TO: FROM: SUBJECT: Retirement Plan Participants and/or Beneficiaries Harvard Human Resources, Benefits Annual Funding

More information

Retirement Plan for Bargaining Unit Employees of Florida Progress Corporation

Retirement Plan for Bargaining Unit Employees of Florida Progress Corporation Document title: AUTHORIZED COPY Retirement Plan for Bargaining Unit Employees of Florida Progress Corporation Document number: HRI-PGNF-00013 Applies to: Keywords: Progress Energy Florida, Inc. (bargaining

More information

1.0 Structure of the Investment. Financial Services Commission of Ontario Commission des services financiers de l Ontario. Investment Guidance Notes

1.0 Structure of the Investment. Financial Services Commission of Ontario Commission des services financiers de l Ontario. Investment Guidance Notes Financial Services Commission of Ontario Commission des services financiers de l Ontario SECTION: INDEX NO.: TITLE: APPROVED BY: Investment Guidance Notes IGN-001 Buy-In Annuities for Defined Benefit Plans

More information

Canadian Association of University Business Officers

Canadian Association of University Business Officers Canadian Association of University Business Officers Financial Reporting Information Note Employee Future Benefits January 2012 Purpose Canadian colleges and universities hereinafter referred to as higher

More information

Deferred Annuities in Target Date Funds

Deferred Annuities in Target Date Funds Deferred Annuities in Target Date Funds An Explanation of Guidance Issued by the Department of the Treasury November 2014 Risk. Reinsurance. Human Resources. Target Date Funds and Deferred Annuities A

More information

Retirement Chapters 10 SM

Retirement Chapters 10 SM Delaware Life Retirement Chapters 0 SM Fixed Index Annuity The Retirement Challenge Retirement is a time to do the things that you never have a chance to do when you re working, raising a family, and paying

More information

PENSION SETTLEMENT STRATEGIES

PENSION SETTLEMENT STRATEGIES PENSION SETTLEMENT STRATEGIES The Challenge of Pension De-risking Deutsche Bank Pension Risk Management. Strategic advice and innovative pension de-risking solutions. Best Bank Overall 2012 Best Bank for

More information

Pension Plan De-Risking : Strengthening Fiduciary Duties to Protect Retirees Executive Summary

Pension Plan De-Risking : Strengthening Fiduciary Duties to Protect Retirees Executive Summary Pension Plan De-Risking : Strengthening Fiduciary Duties to Protect Retirees Executive Summary The steady decline in traditional defined-benefit pension plan sponsorship by corporate America took another

More information

Employee Pension Guide. Pension Plan for Salaried Employees of Union Pacific Corporation and Affiliates

Employee Pension Guide. Pension Plan for Salaried Employees of Union Pacific Corporation and Affiliates Employee Pension Guide Pension Plan for Salaried Employees of Union Pacific Corporation and Affiliates OVERVIEW OF THE PLAN The following provides a brief overview of the Pension Plan for Salaried Employees

More information

billion, while annuity reserves (Table 8.2) increased 6 percent to $2.5 trillion.

billion, while annuity reserves (Table 8.2) increased 6 percent to $2.5 trillion. 8annuities Annuities are financial contracts that pay a steady stream of income for either a fixed period of time or for the lifetime of the annuity owner (the annuitant). Most pension and retirement plan

More information

ANNUAL FUNDING NOTICE For THE UNIVERSITY OF CHICAGO PENSION PLAN FOR STAFF EMPLOYEES. Introduction

ANNUAL FUNDING NOTICE For THE UNIVERSITY OF CHICAGO PENSION PLAN FOR STAFF EMPLOYEES. Introduction ANNUAL FUNDING NOTICE For THE UNIVERSITY OF CHICAGO PENSION PLAN FOR STAFF EMPLOYEES Introduction This notice includes important information about the funding status of your single employer pension plan

More information

Teachers Retirement Association. Marriage Dissolution: Dividing TRA Benefits

Teachers Retirement Association. Marriage Dissolution: Dividing TRA Benefits Teachers Retirement Association Marriage Dissolution: Dividing TRA Benefits Marriage Dissolution: Dividing TRA Benefits Preface This booklet is designed to give all parties involved in a marriage dissolution

More information

Annual Funding Notice for Retirement Plan for Staff Employees

Annual Funding Notice for Retirement Plan for Staff Employees Annual Funding Notice for Retirement Plan for Staff Employees Introduction This notice includes important funding information about your pension plan ( the Plan ). This notice also provides a summary of

More information

Generic Local School District, Ohio Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2015

Generic Local School District, Ohio Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2015 Note 2 - Summary of Significant Accounting Policies Pensions For purposes of measuring the net pension liability, information about the fiduciary net position of the pension plans and additions to/deductions

More information

Fiduciary toolkit for financial professionals

Fiduciary toolkit for financial professionals Fiduciary toolkit for financial professionals For financial advisor use only. Not for distribution to retail investors. Vanguard is your partner to help guide you and your clients in addressing fiduciary

More information

Fully Insured Pension Plan

Fully Insured Pension Plan Fully Insured Pension Plan Marketing Guide There are approximately 23 million small businesses in the U.S.* *Small Business Administration: Small Business Trends (sba.gov) The Market for Fully Insured

More information

DOL Provides Guidance on Qualified Domestic Relations Orders

DOL Provides Guidance on Qualified Domestic Relations Orders Important Information Plan Administration and Operation September 1997* DOL Provides Guidance on Qualified Domestic Relations Orders WHO'S AFFECTED Qualified Domestic Relations Order rules apply to all

More information

Pension De-Risking Outlook for Canada The Role of Reinsurance. Alka Gautam, mba, cpa, ca

Pension De-Risking Outlook for Canada The Role of Reinsurance. Alka Gautam, mba, cpa, ca Pension De-Risking Outlook for Canada The Role of Reinsurance Alka Gautam, mba, cpa, ca President and Chief Executive Officer RGA Life Reinsurance Company of Canada Defined benefit pension plans are excellent

More information

Member s Right to Information: Annual Statements, Termination Statements, Notices. PBA, 1990, s. 25-30, 42, O. Reg. 909 s.

Member s Right to Information: Annual Statements, Termination Statements, Notices. PBA, 1990, s. 25-30, 42, O. Reg. 909 s. Financial Services Commission of Ontario Commission des services financiers de l Ontario SECTION: Access to Information INDEX NO.: I150-800 TITLE: Member s Right to Information: Annual Statements, Termination

More information

ability to accumulate retirement resources while increasing their retirement needs; and

ability to accumulate retirement resources while increasing their retirement needs; and Consulting Retirement Consulting Talent & Rewards The Real Deal 2012 Retirement Income Adequacy at Large Companies RETIREMENT YOU ARE HERE About This Report This study assesses whether employees of large

More information

How will the new RP-2014 mortality tables affect my DB plan strategy?

How will the new RP-2014 mortality tables affect my DB plan strategy? PRACTICE NOTE How will the new RP-2014 mortality tables affect my DB plan strategy? Justin Owens, EA, FSA, Asset Allocation Strategist ISSUE: The Society of Actuaries (SOA) recently released new mortality

More information

Nonqualified Deferred Compensation Plans Why Administration Matters

Nonqualified Deferred Compensation Plans Why Administration Matters Nonqualified Deferred Compensation Plans Why Administration Matters By: Howard D. Stern, FSA Vice President & Actuary The Pangburn Company HOWARD D. STERN, FSA is Vice President and Actuary with the Pangburn

More information

BENEFIT DISTRIBUTION REQUEST FORM (For Distributions due to Termination, Death, Disability, and Retirement) Date: EIN: 16-6184130 TIN: 611256314

BENEFIT DISTRIBUTION REQUEST FORM (For Distributions due to Termination, Death, Disability, and Retirement) Date: EIN: 16-6184130 TIN: 611256314 BENEFIT DISTRIBUTION REQUEST FORM (For Distributions due to Termination, Death, Disability, and Retirement) : EIN: 16-6184130 TIN: 611256314 Plan Name: UFCW LOCAL ONE 401(K) SAVINGS PLAN Participant Data

More information

Table Of Contents. iii

Table Of Contents. iii GASB Statement 45 Table Of Contents Overview...1 Compliance with GASB 45...2 GASB 45 Compared to Pension Requirements...2 Retiree Health Benefits: Potential Ramifications of GASB 45...3 Addressing Retiree

More information

CHAPTER 6 DEFINED BENEFIT AND DEFINED CONTRIBUTION PLANS: UNDERSTANDING THE DIFFERENCES

CHAPTER 6 DEFINED BENEFIT AND DEFINED CONTRIBUTION PLANS: UNDERSTANDING THE DIFFERENCES CHAPTER 6 DEFINED BENEFIT AND DEFINED CONTRIBUTION PLANS: UNDERSTANDING THE DIFFERENCES Introduction Both defined benefit and defined contribution pension plans offer various advantages to employers and

More information

Bulk Terminated Vested Lump Sum Offerings

Bulk Terminated Vested Lump Sum Offerings INSIGHTS Bulk Terminated Vested Lump Sum Offerings August 2015 203.621.1700 2015, Rocaton Investment Advisors, LLC EXECUTIVE SUMMARY * Bulk terminated vested lump sum offerings have become a hot topic

More information

GAO RETIREMENT SECURITY. Annuities with Guaranteed Lifetime Withdrawals Have Both Benefits and Risks, but Regulation Varies across States

GAO RETIREMENT SECURITY. Annuities with Guaranteed Lifetime Withdrawals Have Both Benefits and Risks, but Regulation Varies across States GAO United States Government Accountability Office Report to Congressional Requesters December 2012 RETIREMENT SECURITY Annuities with Guaranteed Lifetime Withdrawals Have Both Benefits and Risks, but

More information

PRESENT LAW AND BACKGROUND RELATING TO EMPLOYER-SPONSORED DEFINED BENEFIT PENSION PLANS AND THE PENSION BENEFIT GUARANTY CORPORATION ( PBGC )

PRESENT LAW AND BACKGROUND RELATING TO EMPLOYER-SPONSORED DEFINED BENEFIT PENSION PLANS AND THE PENSION BENEFIT GUARANTY CORPORATION ( PBGC ) PRESENT LAW AND BACKGROUND RELATING TO EMPLOYER-SPONSORED DEFINED BENEFIT PENSION PLANS AND THE PENSION BENEFIT GUARANTY CORPORATION ( PBGC ) Scheduled for a Public Hearing Before the SENATE COMMITTEE

More information

Annuities The Key to a

Annuities The Key to a Annuities The Key to a Secure Retirement 1 Saving for retirement is crucial, and making sure those resources last throughout your lifetime is just as important. Annuities do both helping you save, then

More information

MACOMB COUNTY, MICHIGAN Notes to Basic Financial Statements December 31, 2014

MACOMB COUNTY, MICHIGAN Notes to Basic Financial Statements December 31, 2014 Notes to Basic Financial Statements Note 8 Employees Retirement System Plan Description and Provision The County sponsors the Macomb County Employees Retirement System (the System ), a single employer

More information

Aon Risk Solutions. Trucking Practice. Specialized Services for the Nation s Road Transportation Industry. Risk. Reinsurance. Human Resources.

Aon Risk Solutions. Trucking Practice. Specialized Services for the Nation s Road Transportation Industry. Risk. Reinsurance. Human Resources. Aon Risk Solutions Trucking Practice Specialized Services for the Nation s Road Transportation Industry Risk. Reinsurance. Human Resources. 1 Solutions Designed to Address the Challenges in the Road Transportation

More information

Defined contribution (DC) plans such as 401(k), Retirement Income in DC Plans. The Next Evolution in Plan Design. The Remaining Problem

Defined contribution (DC) plans such as 401(k), Retirement Income in DC Plans. The Next Evolution in Plan Design. The Remaining Problem Retirement Income in DC Plans The Next Evolution in Plan Design by Steve Vernon Defined contribution (DC) plans such as 401(k), 403(b) and 457 plans are now the most prevalent type of plan for delivering

More information

Retirement Savings Proposals Summary of Key Provisions

Retirement Savings Proposals Summary of Key Provisions Retirement Savings Proposals Summary of Key Provisions February 2014 Three different proposals have recently emerged from Washington D.C., each seeking to improve access to retirement plan savings vehicles.

More information

Global Report: New Requirements Impact Retirement Plans Qualified Under Puerto Rico Tax Code

Global Report: New Requirements Impact Retirement Plans Qualified Under Puerto Rico Tax Code Global Report: New Requirements Impact Retirement Plans Qualified Under Puerto Rico Tax Code April 2011 On January 31, 2011, the Puerto Rico legislature adopted a new tax code that substantially affects

More information

PROFIT SHARING PLANS. for Small Businesses

PROFIT SHARING PLANS. for Small Businesses PROFIT SHARING PLANS for Small Businesses 1 Profit Sharing Plans for Small Businesses is a joint project of the U.S. Department of Labor s Employee Benefits Security Administration (EBSA) and the Internal

More information

TREASURY FACT SHEET: HELPING AMERICAN FAMILIES ACHIEVE RETIREMENT SECURITY BY EXPANDING LIFETIME INCOME CHOICES

TREASURY FACT SHEET: HELPING AMERICAN FAMILIES ACHIEVE RETIREMENT SECURITY BY EXPANDING LIFETIME INCOME CHOICES TREASURY FACT SHEET: HELPING AMERICAN FAMILIES ACHIEVE RETIREMENT SECURITY BY EXPANDING LIFETIME INCOME CHOICES In September 2009, President Obama announced several new steps to make it easier for American

More information

Meeting Between Federal Reserve Board Staff and Representatives of Prudential Financial, Inc. May 8, 2013

Meeting Between Federal Reserve Board Staff and Representatives of Prudential Financial, Inc. May 8, 2013 Meeting Between Federal Reserve Board Staff and Representatives of Prudential Financial, Inc. May 8, 2013 Participants: Anna Lee Hewko, Mona Elliot, Sviatlana Phelan, Joanne Wakim, Linda Duzick, Anthony

More information

Pensions & Post-Retirement Benefits

Pensions & Post-Retirement Benefits FIN 551: Fundamental Analysis 1 Pensions & Post-Retirement Benefits The Issues Separate set of pension books Defined contribution vs. defined benefit plans» Problem exists with defined benefit plans Annual

More information

Longevity Insurance in DC Plans Paving the Way for QLACs

Longevity Insurance in DC Plans Paving the Way for QLACs Longevity Insurance in DC Plans Paving the Way for QLACs A Roadmap to the 2014 Regulations on Qualifying Longevity Annuity Contracts and Plan Sponsor Considerations October 2014 Risk. Reinsurance. Human

More information