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Finance Chiefs Express High Satisfaction with Pension Risk Transfers

Jul 26, 2019

Key Takeaways

  • Once a little-known practice, pension risk transfers have surged in popularity.
  • PRTs may be done for different reasons, but finance executives agree on the positive results.
  • What’s a satisfied customer to do? For many, they’re considering another pension risk transfer deal.

 

In 2012, General Motors Co. and Verizon Communications Inc. surprised much of the pension community when they undertook on a grand scale what until then had been a relatively obscure strategy for shedding pension risk: purchasing a group annuity to cover some of their defined benefit (DB) plan’s pension liabilities.

At a time when no other companies had done more than a $1 billion transaction in a single year, GM shed about $25 billion of it pension liabilities1 and Verizon about $7.5 billion.2 Since those two megadeals, the strategy has surged in popularity.

Now, a survey from CFO Research helps to explain why: Finance chiefs who have used it report broad satisfaction with the outcomes, with nearly three out of four saying they are very likely to do additional transactions in the years ahead.

 

Read More

For a deeper look at why there is positive feedback on pension risk transfers, read Finance Chiefs Express High Satisfaction with Pension Risk Transfers  .

 You may also be interested in other CFO Research topics.

1 http://www.businessinsurance.com/ article/20150621/STORY/150619954? template=printart
2 http://www.pionline.com/article/20121017/ ONLINE/121019896/verizon-transfers-75- billion-to-prudential-in-partial-pension-buyout

 

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