Corporations will continue to transfer risk from their defined benefit pension plans in 2016, a trend that was very popular in 2015.
“Meager investment returns and low interest rates made 2015 a challenging year for many defined benefit plans, with funded status rising only modestly. Many plan sponsors took proactive steps to reduce their liability through lump sum offerings and some major annuity buyout transactions,” says Matt McDaniel, U.S. head of defined benefit risk at Mercer. “Looking ahead, we believe the path to improvement will be through taking actions when opportunities present themselves, and not waiting for a slow melt up in markets and rates.”
