Unfunded pension liabilities are forcing many pension plan sponsors to look for alternative ways to manage their pension risk.

New industry regulations require companies to show their pension liabilities on their balance sheet. They also must contribute to their pension plans every year, which takes away money from their core businesses. This has forced many companies to look at different options to manage their risk and eventually terminate their defined benefit pension plans.

Prior to the Pension Protection Act of 2006, companies that terminated their pension plans did so because they were going through a merger or acquisition or were filing for bankruptcy. Now, "companies are looking to terminate their pension plans as a strategic risk management decision," said Jay Dinunzio, a senior consultant at Dietrich & Associates, a pension risk transfer firm.