Plan Sponsor Alert: Revisiting De-Risking Options

Thanks to better returns and an uptick in discount rates used to value plan liabilities, defined benefit plans' funding statuses have improved to some of their highest levels since the Great Recession. Many plan sponsors are eager to preserve these gains and want to take risk off their balance sheet by implementing "de-risking strategies." Because of the recent changes in funding levels and the various de-risking methods at their disposal, plan sponsors should use this opportunity to re-examine their current approach to best fit their goals for their plan(s) and their participants.

Determining the right de-risking strategy

Although you may have read about de-risking in the past, the current environment and appetite for de-risking has changed significantly over the past few years. The de-risking activity saw a brief slowdown before the COVID-19 pandemic, but nearly all plan sponsors responding to MetLife's 2021 Pension Transfer Risk poll said they intend to