Since the global financial crisis, gradual de‑risking emerged as a trend through various investment and risk transfer measures with mixed results. In 2017, increased carry costs and economic conditions created new opportunities for defined benefits (DB) plan sponsors to take action.
Combined pre‑funding and risk transfer actions have typically been economically positive, primarily due to the substantial increase in PBGC premiums and other DB maintenance costs. However, pension sponsors are growing tired of market and regulatory volatility and are contemplating bolder action. What is more, tax reform will drive accelerated pre‑funding make a tipping point imminent.