Abstract
Ongoing market uncertainty, rising PBGC premiums, low—and possibly even negative—interest rates, and lengthening life expectancies are among the dynamics compelling plan sponsors and insurers with annuity obligations to re-evaluate pension risk and reconsider de-risking solutions. This article examines those dynamics and explores the strategies available to mitigate pension risk, while bolstering participants’ benefit security. Borrowing to fund, liability-driven investing, targeted buyouts, and longevity insurance and reinsurance are effective solutions in today’s economic environment. Resourceful solutions like participating contracts and products that enable premiums to be paid over time as funded status improves should also be considered.
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