Kimberly-Clark Corp.’s recent announcement that it will purchase group annuity contracts for about 21,000 retirees representing US$2.5 billion in pension obligations is the latest indication that the trend to de-risk pension plans is continuing.
Towers Watson says plan sponsors are most apt to consider de-risking solutions that allow effective risk management of DB plans while also maintaining benefit security to plan participants.
Read: Kimberly-Clark transferring pension obligations
“This transaction continues a measured trend toward thoughtful pension de-risking,” says Mike Archer, senior retirement consultant at Towers Watson. “While many plan sponsors are taking different routes toward the end goal of lowering risk, they are focused on taking a responsible path toward the protection and support of retirees’ long-term benefits.”
The announcement by Kimberly-Clark comes at a period when pension de-risking activity remains very high.
Total annuity purchase market activity during 2014 was US$8.7 billion.
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