A pension risk transfer (PRT) to terminate a defined benefit (DB) plan reflects heavily on a plan sponsor’s balance sheet, which may stop in its tracks a decision to do so.
“A big driver of the 2018 buy-out sales was a combination of mid- to large-PRT deals,” says Eugene Noble, research analyst, LIMRA Secure Retirement Institute. “We also saw two new insurance companies enter the PRT market this year.”
If interest rates continue to rise, this may have a negative impact on equity valuations; consequently, according to Goldman Sachs research, the present period may represent a limited window for optimal pension risk transfer actions.
The sizable deal comes as more large employers close to within striking distance of PRT transactions.