Do you know how much keeping former employees in your defined
benefit plan costs? Mercer's US Pension Buyout Index for
November 2013 reports that as of December 31, 2013, the economic
cost of retaining retiree liabilities exceeded the buyout cost.
An important factor is that, last year, Congress increased the
annual base premium payable for each Pension Benefit Guaranty
Corporation (PBGC) insured defined benefit plan participant from
$50 to $57 for 2015 and to $64 in 2016. This will make the cost of
retaining terminated participants in U.S. defined benefit plans
more expensive relative to providing them with lump sum payouts or
fully paid up annuity contracts, actions which remove them from the
balance sheet and the PBGC insurance program. And recent
improvements in plan funding levels from the stock market boom and
interest rate increases have made more plans eligible to consider
de-risking payouts, since lump sum payments and annuity purchases
are restricted for
