Featured Topics
Retirement Industry
Magazine Archive
Education/Advice
Where Do you Go for Financial Advice?
As far as the timing of the deal, the Verizon spokesman said the company has been evaluating for a while ways to better understand, manage and predict its long-term pension costs. “Given that the Federal Reserve has indicated interest rates will remain low into 2015, the timing was right to remove some of our risks associated with this volatility,” he stated. McDonald believes as plan sponsors become more familiar with these types of transactions, they will understand the economic value of transferring the investment and longevity risk associated with pension liabilities to a company, such as Prudential, for whom management of these risks is a core competency. “We see a trend emerging now that we expect to develop into a robust pension risk transfer market,” she said. Prudential signed the nation’s first pension buy-in deal last May with Hickory, North Carolina-based Hickory Springs Manufacturing Company (see “Pru Completes Nation’s First Pension Buy-In”). Since then, a number of companies have announced pension risk transfer moves (see “Another Company Offering Lump Sums to De-Risk Pension”).
As far as the timing of the deal, the Verizon spokesman said the company has been evaluating for a while ways to better understand, manage and predict its long-term pension costs. “Given that the Federal Reserve has indicated interest rates will remain low into 2015, the timing was right to remove some of our risks associated with this volatility,” he stated.
McDonald believes as plan sponsors become more familiar with these types of transactions, they will understand the economic value of transferring the investment and longevity risk associated with pension liabilities to a company, such as Prudential, for whom management of these risks is a core competency. “We see a trend emerging now that we expect to develop into a robust pension risk transfer market,” she said.
Prudential signed the nation’s first pension buy-in deal last May with Hickory, North Carolina-based Hickory Springs Manufacturing Company (see “Pru Completes Nation’s First Pension Buy-In”). Since then, a number of companies have announced pension risk transfer moves (see “Another Company Offering Lump Sums to De-Risk Pension”).
Rebecca Mooreeditors@plansponsor.com