The federal government moved to limit pension de-riskinglast month when it prohibited companies from offering lump-sumbuyouts to pension plan participants who already are receiving apension.

While the announcement fromthe Internal Revenue Service put an end to that type of lump-sumoffer, consultants said they still see a booming market for pensionde-risking transactions. The IRS move leaves some question, though,as to whether the government might take additional steps toregulate this area.

Companies can use two kinds of transactions to reduce theirpension obligations: the offer of lump-sum buyouts to planparticipants or the purchase of an annuity from an insurancecompany, which effectively transfers responsibility for a certainportion of plan participants to the insurer.

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Susan Kelly

Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.