Introduction Building on our previous discussion of sequence risk, this chapter focuses on actionable strategies to mitigate its impact. We explore how Liability-Driven Investing (LDI) and Cash-Flow-Driven Investing (CDI) can serve as strategic shields against forced liquidation and funding deterioration. Read more
IntroductionMany actuaries and investment consultants provide trustees with simple projections to show where the financial status of the plan is heading. However, in many cases, these projections are based on simple assumptions which everyone knows will be wrong, but they Read more
This first installment in our whitepaper series introduces the foundational challenge facing mature pension plans: negative cash flow. When benefit payments regularly surpass incoming contributions, trustees encounter a structural issue that may affect a plan’s funded status. This paper explores Read more
This is another type of defined benefit plan that provides lifetime income to the participants of the plan. Some have called these hybrid plans but they are not considered hybrid plans under the IRS regulations. In some cases, if the Read more
These plans have been around for a long time, but are now being viewed negatively by employers. Much of that is due to not being aware of how to best manage the growing risks inherent in these plans. Without proper Read more
Defined benefit (DB) pension plans have many risks and, unfortunately, these risks are not always addressed and managed appropriately. In some cases, plan sponsors move to defined contribution (DC) plans as they feel these are risk-free but there is no Read more
Special Financial Assistance Guidance Issued by the PBGC Background The PBGC administers a Multiemployer Insurance Program under Title IV of ERISA. In recent years, the sustainability of this insurance program became challenged as many multiemployer plans faced the prospect of Read more
“Fresh Start” and Extended Amortization Funding Shortfalls The Act provides a “fresh start” on the amortization of a single-employer plan’s underfunding. For the plan year beginning in 2022 (or, if elected by the plan sponsor, a plan year beginning in Read more
Financial Assistance for Severely Underfunded Multiemployer Plans The Act creates a special financial assistance program to ensure the solvency of severely underfunded multiemployer plans by providing a lump sum payment such that the plans can pay all benefits through 2051. Read more
This white paper discusses a couple of new adjustable pension plan designs available to plan sponsors and the rationale for why they should be considered. · For years employers contributing to Defined Benefit Pension Plans have been wary of Read more