Look Beyond the Numbers for Pension Risk Transfer


No doubt, pension risk transfer activity is growing. Companies of all sizes, sectors and locations are shifting risk off their books to eliminate pension obligations. According to a study by the Pension Benefit Guaranty Corporation, between 2009 and 2013, more than 500 defined benefit plans transferred $67 billion of risk through lump-sum distributions and annuity purchases. 

If you have clients who are business owners, executives or professionals, e.g., doctors, dentists or lawyers, chances are they have a defined benefit pension plan. Although many of these plans have been replaced in recent years by 401(k) or other contributory plans, defined benefit plans remain a liability on a company’s books. Plan sponsors face important decisions to address rising costs, increased regulation and uncertain market conditions.

Pension risk transfer can make sense for both parties – plan sponsors typically want to strengthen their balance sheet and ensure employees receive their retirement benefits, and insurance companies are in the business of investing and administering retiree liabilities. 

This solution may not work for every situation, however. Many frozen pension plans lack sufficient assets to complete a transfer. These underfunded plans need help adjusting their investment strategy to close the gap between asset value and pension benefit obligation. 

When selecting an annuity provider for pension risk transfer, plan sponsors have more to consider than corporate financial and competitive pricing. They should also factor in whether the provider: 

  • Will provide comprehensive customer service during and after plan transfer
  • Offers retirement education for employees
  • Responds to participant concerns


Bottom Line:

Now is an excellent time for you to offer pension risk transfer solutions that meet your clients’ needs and fulfill commitments made to plan participants. Need help getting started? Drop me a line or call any time. I’m happy to help you identify prospects and provide expertise to help you generate revenue in this growing market. 


Learn More

Risk Transfer Study, Pension Benefit Guaranty Corporation, December 2015:


About the Author

At Ash Brokerage, Steve Pilger helps clients design and execute cost-effective risk transfer strategies for their pension plans. He is dedicated to finding solutions that meet the needs of plan sponsors and fulfill the commitments made to plan participants. Contact him at or (800) 589-3000 ext. 6828. 

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