Do you have questions on how to manage your pension risk? Watch how a CFO “Buys In” to a pension strategy from Pacific Life.
Recent market volatility has convinced many defined-benefit plan sponsors that they need to reduce the risks inherent in their plans, and do it soon. Yet, some strategies they might consider, such as terminating the plan, cannot be completed immediately.
If that’s your situation, consider a buy-in annuity contract. A buy-in annuity is a versatile tool that can be used in a variety of situations, including:
Removing risk prior to plan termination – If you’re not yet ready to terminate your plan, a buy-in annuity can lock down plan costs now, giving you time to file the necessary termination and regulatory paperwork with the IRS and Pension Benefit Guaranty Corporation (PBGC).
Delaying recognition of settlement accounting – With a buy-in annuity, you can de-risk your plan without the need to recognize the pension losses on your balance sheet until later when you terminate the plan.
Facilitating a merger or acquisition – Because a buy-in annuity locks down plan costs, companies negotiating a merger or acquisition can guarantee what those costs will be after the merger/acquisition is complete.
Financially securing nonqualified SERP benefits – A buy-in annuity can guarantee monthly payments under a Supplemental Executive Retirement Plan (SERP).
For more insight on how a buy-in annuity can help achieve goals like these, contact Pacific Life.
Pacific Life, its affiliates, its distributors, and respective representatives do not provide tax, accounting, or legal advice. Any taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor or attorney.
Pacific Life is a product provider. It is not a fiduciary and therefore does not give advice or make recommendations regarding insurance or investment products. Pacific Life, its affiliates, its distributors, and respective representatives do not provide any employer-sponsored qualified plan administrative services or impartial advice about investments and do not act in a fiduciary capacity for any plan.
Pacific Life refers to Pacific Life Insurance Company (Newport Beach, CA) and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York, and in all states by Pacific Life & Annuity Company. Product availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues.