The budget approved by Congress on Wednesday raises premiums companies must pay to the Pension Benefits Guaranty Corp., a point that might cause many employers to settle their retirement plan liabilities through lump sum payments or by buying annuities.
The effect of the premium hikes, according to Aon Hewitt, could increase the carrying costs of unfunded pension liabilities by more than 3 percent. That would cause companies to consider derisking their pension plans.
The two approaches to doing that are either offering plan participants a lump sum payout or purchasing an annuity from an insurance company. In each case, the pension liabilities are removed from the company books.
Continue Reading for Free
Register and gain access to:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
