By simply de-risking their pension plan, companies can realize most of the benefits of annuity purchases without incurring the upfront liquidity costs or committing to an irreversible decision. Along with the reduction in pension volatility, de-risking should improve credit ratings for some companies with large pension plans relative to their core businesses. The desire to de-risk pension plans is understandable given this implied credit rating “cost.”

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NISA The Credit Rating Impact of Pension De Risking

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