Pacific Transferred Buy-Out
A "buy-out" strategy provides plan sponsors with a way to remove pension risk and benefit liability from the plan on either a partial (covering a portion of plan participants) or full (complete plan termination) basis.
Key Features
- Guaranteed group annuity contract that transfers all future obligations and all risks from the plan sponsor to Pacific Life for the covered group
- Completely removes the liability from the plan sponsor’s balance sheet
- Plan sponsor is no longer subject to premiums payable to the Pension Benefit Guarantee Corporation (PBGC)
- Pacific Life issues individual annuity certificates and makes all payment directly to annuitants
- Pacific Life provides all annuitant servicing and bears all administrative expenses
- May be funded in either Pacific Life’s general account or a separate account.
When to Use
- For the complete or partial plan terminations of defined benefit and nonqualified deferred compensation plans
- To reduce risk and/or administrative expenses and investments (PBGC premiums, audit, actuarial evaluations, etc.)