New Rules for Pension Risk Transfers?

As more companies prepare to offload some of the risk in their pension plans, an advisory group wants the Labor Department to issue new guidance.

This year’s improvement in pension plan funding is seen as paving the way for a groundswell in pension de-risking transactions next year. And the prospect of additional rules for such transactions from the U.S. Department of Labor isn’t expected to interfere significantly with that pickup.

Companies can lower the risk involved in defined-benefit pension plans by reallocating plan assets to hold more fixed-income securities, by offering lump-sum buyouts to some participants, or by buying an annuity to cover a group of plan participants.

Prospect of New Rules

Recently, though, the ERISA Advisory Council, a group that makes recommendations to the Labor Department related to ERISA, suggested that Labor provide companies with additional guidance on pension de-risking.

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