On Nov. 5, 2013, the ERISA Advisory Council submitted findings
and recommendations on pension de-risking to the Secretary of
Labor. Pension de-risking transactions have received a lot of
attention lately, both in the media and among sponsors of defined
benefit pension plans. Therefore, this communication from the
Advisory Council is an important summary of the current state of
the market for de-risking transactions from a business and legal
point of view, as well as a possible sneak preview of potential new
government regulations in this area.
Background
As readers are probably aware, defined benefit pension plans
present risk to sponsors since they are fully responsible to fund
benefits for participants up to the level provided in the plan. As
a very general matter, "de-risking" refers to one of two
ways that a pension plan sponsor can try to reduce its exposure to
the volatility it faces, whether it be funding volatility or
balance sheet volatility. Funding
