Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Life Health > Life Insurance

Dietrich: Pension Disposal Climate So-So

Your article was successfully shared with the contacts you provided.

Defined-benefit pension plan sponsors may find that current annuity rates make shedding unwanted pension obligations possible but not especially appealing.

The Pension Risk Transfer Index now stands at 90.1, meaning that this is not as bad a time to close out a plan by buying an annuity as it was during the period from September 2010 to January 2011 but not as attractive of a time to annuitize as it was in 2008 and 2009.

Dietrich & Associates Inc., Plymouth, Mass., a pension risk-transfer firm, created the index to give employers an indicator they can use to decide when to annuitize pension obligations.

The funded status level of the typical plan has a 50% weight in the index formula. Current and past annuity rates have a 30% weight, and the spread of annuity rates over Treasury bonds and corporate bonds has a 20% weight.

Dietrich analysts have used historic data to calculate annual index figures going back to 2008.

The index stood at 110.6 in January 2008, rose to 121.4 in January 2009, then fell to 91.5 in January 2010. The index has stayed under 93 since January 2010.

Other pension coverage from National Underwriter Life & Health:


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.