Pension risk transfer: Now might be the time to consider offloading the risk

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Some of the country’s largest and most storied brands like Ford and Coca-Cola have long offered a pension plan—a benefit that historically helped maintain talent and reward employee loyalty with the promise of a steady stream of income lasting the length of the employee’s retirement. In fact, a recent survey by Athene uncovered that over one-third of Americans (36%) indicated that they are primarily dependent on employer-sponsored retirement plans to save for retirement. Yet the world of private-sector pensions has become increasingly smaller, with only 15% of private industry employees being offered a traditional pension plan in 2021, according to the Bureau of Labor Statistics.

Some may argue that today’s market and regulatory environment has made it too difficult for companies to manage their pension plan liabilities, but there is a “glass half full” solution. One of the biggest ways for companies to lighten their balance sheets while sustaining employee loyalty is by offloading pension risk via Pension Risk Transfer (PRT).