Pension de-risking need not be an all-or-nothing decision. In fact, plan fiduciaries may be surprised by the degree to which pension risk profiles can be changed – marginally or materially – through asset allocation decisions and liability-driven investment (LDI) techniques. While annuity buyouts define the end point of the so-called de-risking spectrum, fiduciaries should compare them to other “hibernation” approaches that do not require paying insurance provider premiums, terminating the plan or relinquishing the flexibility to adjust the plan risk profile in the future.

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NISA Defining the De Risking Spectrum

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