From:                                         BCG Pension Risk Consultants <>

Sent:                                           Monday, August 27, 2018 2:17 PM

To:                                               Terry McCauley

Subject:                                     The Pension Insider June 2018


The Pension Insider


The Pension Insider is a monthly newsletter developed for individuals who work in the pension arena. The Pension Insider was created to share ideas, success stories, coming events and industry specific articles.



June 2018- Volume 80, Edition 1



Trillions of Dollars in Pensions Can Attract and Repel Insurers By Julie Edde and Katherine Chiglinsky | Bloomberg | March 29, 2018


The trillions of dollars in pension liabilities worldwide have underlined different strategies pursued by insurers, as some look to take on retirement assets from employers and others are busy offloading similar risks.


In one camp are firms such as Prudential Plc, which agreed in March to sell 12 billion pounds ($17 billion) of U.K. annuities. The London-based company isn’t participating in the pension-derisking market where insurers offer employers annuity contracts to better manage the risk of those retirement obligations. On the other side are insurers like Legal & General Group Plc that are looking to capitalize on companies’ desire to shed those pension commitments.


“Insurers all have different requirements for returns on capital,” Steve Keating, managing director of BCG Pension Risk Consultants Inc., said in a phone interview. “Sometimes they can achieve that in the pension-risk transfer business. Others have a better use of capital elsewhere.”

Click Here to read full article




BCG at the 2018 Plan Sponsor National Conference 

Pension Risk Transfer Options for Qualified and Non-qualified DB Pension Plans


Amid rising costs and increasing complexities when managing defined benefit (DB) plans, many plan sponsors are looking to shed their DB liabilities. Industry sources will discuss options plan sponsors have for doing so.


Moderator: Michael W. Kozemchak, Managing Director, Institutional Investment Consulting


Panelists: Marty Menin, Senior Director - Retirement Solutions Division, Pacific Life

Michael E. Devlin, Principal, BCG Pension Risk Consultants

David Hinderstein, Strategic Retirement Group, Inc.

For more information about your PRT Options, contact BCG Pension Risk Consultants or call (855) 432-7658 ext. 403




BCG at the 2018 AICPA Employee Benefit Plans Conference

Stop Paying Unnecessary DB Plan Expenses 


DB plan expenses are increasing at an alarming rate. The Pension Benefit Guarantee Corporation (PBGC) charges both a fixed premium per person which will increase to $80 per participant in 2019 (130% increase since 2012) and a variable premium on the amount of under-funding that will increase to 4.4% in 2019 (a 400% increase since 2013). These premiums can be reduced or avoided by fully funding the plan and/or reducing the number of participants. This session will: 

·     Identify how plan sponsors are using new strategies to reduce the cost of the plan; and

·     Identify strategies to help manage the funded status to meet their objectives


Steve Keating – BCG Penbridge

Russ Proctor – Pacific Life Insurance Company

Marty Menin – Pacific Life Insurance Company

For more information about Unnecessary DB Plan Expenses, contact BCG Pension Risk Consultants or call (230) 955-1566




An Opportune Time for Funding

By David Geloran | BCG Pension Risk Consultants | May 2018



Many pension plan sponsors have been experiencing relief in their minimum required funding as a result of highway legislation called “Moving Ahead for Progress in the 21st Century” (“MAP-21”). With interest rates having remained at historically low levels for over a decade, this relief will soon wane. Plans may soon see an increase in required contributions, even if interest rates start to rise. Plan sponsors have a limited opportunity to amplify cost savings by prefunding to take advantage of 2017 tax rates.



The Pension Protection Act of 2006 (“PPA”) defined the interest rate for minimum funding purposes to be a 24-month average of high quality corporate bonds. Interest rates languished at historically low levels for the past decade, contributing to the pension “perfect storm” – the combination of the full enactment of PPA, the accounting codification under ASC-715, the credit crisis, and the great recession. As plan assets evaporated, the short-term average of a very long period of low interest rates drove liability valuations higher.


MAP-21 provided relief to plan sponsors rocked by increasing minimum required contributions and lower AFTAPs (percent funded). Introducing a second funding rate (called the “stabilized rate”, equal to 90% of the 25-year average of high quality corporate bonds), the longer averaging period provided a higher and more stable average from year-to-year. The higher of these two rates (the 24 month average under PPA or the 25-year average under Map-21) are then used to determine the plan liabilities for minimum funding purpose. 


However, as more years of low interest rates from today enter the average period, and replace the higher interest rates from the early 1990’s, this stabilization rate is starting to provide less relief. The initial expectation was that bond rates would rebound quickly, and the greater-of comparison of the PPA and MAP-21 rate would quickly revert to the PPA rate. Instead, the 25-year average is steadily dropping annually.

Click Here to download full article





Contact BCG:


Austin Office

Patrick McLean, CPA





 Boston Corporate Office

Michael E. Devlin, Principal

(855) 432-7658  ext. 403


Steve Keating

(203) 955-1566


David Geloran, CEBS®, MBA

855-432-7658 ext. 401




Chicago Office

David Rumas, FCA, EA, MAAA

(855) 432-7658 ext. 406


Karen Ambrose

(855) 432-7658 ext. 410


Karl K. Oman, ASA, EA

(855) 432-7658 ext. 408




Cincinnati Office

Debbie M. Sharp, CEBS®

(855) 432-7658 ext. 405




Boise/Los Angeles Offices

Sean O'Flaherty AIF®, CRPS®

(855) 432-7658 ext. 402



ANNUITY RATES Standard Pension Closeout/Terminal Funding Case Rates:

(No lump sums, no disability or unusual provisions)

Retirees - 2.98%

Term Vesteds - 3.03%

Actives - 3.13%

Annuity Purchase Rates as of June 18, 2018



BCG Pension Risk Consultants

We specialize in settling pension liabilities for terminating and ongoing pension plans.

Today’s Solutions for Tomorrow’s Needs. 




BCG Pension Risk Consultants | 100 Grandview Road , Suite 303, Braintree, MA 02184

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