Many cheered when the federal government lowered the minimum RRIF withdrawals in the 2015 budget, reports Advisor.ca.
Demand grows as firms look to shed pension liabilities.
Many employers that sponsor DB pension plans are considering reducing the risk in their plans. An approach to reduce risk that is gaining popularity is to purchase a group annuity in respect of all or a portion of a pension plan’s retiree (and in some cases deferred vested) obligations.
The evolving annuity: where it’s been and where it’s going
NCR has purchased a single premium group annuity contract from The Principal to transfer about US$160 million ($185.8 million) of pension liabilities.
Visteon Corp. has entered into an agreement to transfer certain American pension assets to Prudential Insurance Company of America to settle approximately US$350 million of Visteon's US$1.1 billion in outstanding pension obligations.
Most regulators do not view a buyout group annuity purchase from an ongoing pension plan as a complete settlement of the obligations covered by the annuity. Some DB plan sponsors with a desire to reduce pension risk face this barrier.
Is 2014 the dawn of a new era in pension plan de-risking?
Coverage of the 2013 Risk Management Conference
It was, literally, a big deal when the Canadian Wheat Board (CWB) off-loaded the risk of its underfunded DB pension plan to Sun Life Financial with a $150-million group annuity purchase. Steering this complex deal seemed impossible at times—no Canadian pension plan had bought an inflation-adjusted group annuity before. But the Winnipeg-based grain marketer plowed […]