From:                                         BCG Pension Risk Consultants <>

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

To:                                               Terry McCauley

Subject:                                     The Pension Insider November 2017


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.



November 2017- Volume 77, Edition 1



DB Plans Far From Being Eliminated

By Rebecca Moore | PLANSPONSOR | September, 2017 

While headlines have stated the disappearance of defined benefit (DB) retirement plans, a report from Aon shows only 6% of U.S. corporate DB plan obligations have actually been settled since 2012. However, Aon’s study, covering 100 U.S. plan sponsors totaling nearly four million participants and $400 billion in assets, found the majority of plan sponsors are continuing to look at settlement strategies to opportunistically shrink the size of their pension plans. Click Here  for full article


Leaving Pension Management, and Pension Risk, Behind

By Chris Schmidt | CFO Magazine| October, 03 2017 

A shifting economic and regulatory environment is driving increased pension risk transfer activity.

For several decades, corporate America had been looking for ways to shed the increasing costs and performance risk of sponsoring traditional, defined-benefit (DB) pension plans. Freezing plans by halting the accrual of future benefits had become a popular strategy. But plan sponsors that did that were still on the hook for funding benefits that had accrued, as well as for overseeing plans for decades to come as plan participants and beneficiaries continued to draw benefits.

Five years ago, General Motors and Verizon Communications surprised much of the pension community when they undertook on a grand scale what until then had been a relatively obscure strategy for shedding pension risk: purchasing a group annuity to cover some of their DB plan’s pension liabilities. Since those two starter megadeals, the strategy’s popularity has surged.

In a typical transaction, the plan sponsor transfers to the insurer securities and cash equal in value to the benefit obligation the sponsor wishes to shed. The transfer is usually a portion of the sponsor’s total obligation, since shedding the entire obligation at one time could be prohibitively expensive. Once executed, the transaction moves the pension liability from the plan sponsor’s balance sheet to the insurer’s balance sheet, and the insurer becomes responsible for paying all future pension benefits to plan participants covered by the agreement.

Drivers of Change

What’s prompting an increasing number of DB plan sponsors to consider transferring some or all of their pension benefit obligations to an insurance company? A recent CFO Research survey, conducted in cooperation with Prudential Financial, found that, of 80 senior finance executives at U.S. companies that sponsor DB pension plans, more than 4 in 10 respondents (45%) said their firms had already completed a pension risk transfer. Respondents who had completed a risk transfer indicated that their decision to purchase a group annuity had been driven by a broad list of factors, but a desire to manage total pension costs including mitigating the impact of increased premiums paid to the Pension Benefit Guaranty Corporation (PBGC) - was high on their list. Click Here for full article


PBGC Makes Proposals About Plan Terminations

By Rebecca Moore | PLANSPONSOR | October 02, 2017 

The agency is proposing that termination forms may be filed electronically and that plan sponsors be offered a pre-filing consultation.

The Pension Benefit Guaranty Corporation (PBGC) intends to request that the Office of Management and Budget (OMB) extend approval, under the Paperwork Reduction Act of 1995, of a collection of information program operating under its regulations on Termination of Single-Employer Plans and Missing Participants.

The request also involves implementation forms and instructions. The agency notes that under section 4041 of the Employee Retirement Income Security Act (ERISA), as amended, a single-employer pension plan may terminate voluntarily only if it satisfies the requirements for either a standard or a distress termination. Under the PBGC’s termination regulation, a plan administrator wishing to terminate a plan is required to submit specified information to the PBGC in support of the proposed termination and to provide specified information regarding the proposed termination to third parties (participants, beneficiaries, alternate payees, and employee organizations).

In the case of a plan with participants or beneficiaries who cannot be located when their benefits are to be distributed, the plan administrator is subject to the requirements of ERISA section 4050 and the PBGC’s regulation on missing participants.

The collection of information under these regulations and the forms and instructions have been approved by the OMB until November 30, 2017. The PBGC is requesting that the OMB extend its approval for three years, with modifications.

The agency is proposing to provide that the plan administrator of a plan terminating in a standard or distress termination that closes out in the private sector, may submit termination forms electronically (scanned and emailed or faxed), rather than by mail or personal delivery only.

In addition, the PBGC is proposing to include an opportunity for plan sponsors to contact the agency for a pre-filing consultation to discuss the filing process and ensure the filing of a distress termination is appropriate given the sponsor’s specific circumstances. The agency says this consultation will assist it and the plan sponsor in exploring whether a waiver of one or more filing obligations is appropriate, identifying potential issues preventing a distress termination of a particular plan, and may indicate that commencement of an agency-initiated termination of the pension plan is warranted. This consultation will be voluntary and will result in little or no added burden on the plan sponsor. Click Here for full article

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DB Plans Far From Being Eliminated



Leaving Pension Management, and Pension Risk, Behind



PBGC Makes Proposals About Plan Terminations








Austin Office

Patrick McLean, CPA





 Boston Corporate Office

Michael E. Devlin, Principal

(855) 432-7658  ext. 403



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




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 - 2.43%

Term Vesteds - 2.63%

Actives - 2.73%

Annuity Purchase Rates as of November 06, 2017



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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