As companies still fortunate enough to offer pension programs have recently been focusing on cutting the risks that impact their corporate balance sheets, human resources firm Mercer offers 10 tips that plan sponsors should keep in mind for their defined-benefit plans in the new year.
Use interest triggers and fund status triggers to de-risk glide-paths. Given the tightening by the Federal Reserve in 2014, more plan sponsors are expected to adopt triggers based on funded status as well as interest rate triggers for their glide-paths. With these in place, plan sponsors can lock in interest rate increases as they happen. For plan sponsors that anticipate cutting their pension plans by a certain time, they are now using time-based triggers.
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