MetLife has been tracking pension risk management trends and developments for over 20 years. For our 2023 Pension Risk Transfer Poll, MetLife commissioned a survey of 250 defined benefit (DB) plan sponsors to assess the impact of market forces on their de-risking strategies.
This poll assessed:
- If—and when—U.S. companies are considering divesting all pension plan liabilities
- Whether the current market environment is impacting their de-risking plans
- What PRT activities they are most likely to use
- The extent to which they are tracking public policy developments that could impact their fiduciary responsibilities
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In recent years, the U.S. PRT market has seen consistent growth – with no signs of slowing down. In 2022, total PRT market sales accelerated to $52 billion, surpassing the 2021 record when the market reached $38 billion in sales.1 Going forward, nine in 10 companies plan to completely divest all of their DB pension plan liabilities in an average of 4.1 years.
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Evaluating the Long-Term Value of DB Plan Sponsorship
say that their company is weighing their DB plan’s value against the cost of the benefit
say the company’s DB plan is receiving significant attention from corporate management
Primary catalysts for initiating a pension risk transfer to an insurer include several macroeconomic forces: inflation, market volatility, rising interest rates and recessionary concerns.
of plan sponsors say they would be concerned about missing a window of opportunity to secure an annuity buyout with very competitive rates.
Did you know?
To keep benefit promises, many are transferring their pension plan obligations to an insurer -- with 90% considering an annuity buyout.
Conclusion
Today, many plan sponsors are preparing for – and taking decisive action to mitigate – their pension risks. Pension risk transfer allows companies to meet their pension commitments to plan participants, while focusing on their core businesses.
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1LIMRA historical data