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Pension De‐Risking Remains Strong in 2020

Regardless of dealing with problems associated with the Covid‐19 pandemic, plan sponsors continued to pursue defined benefit plan terminations or liability de‐risking. Following an initial slow start, global plan de‐risking activities picked up in the second half of 2020. Pension plan sponsors took advantage of a rebound in funded status as financial markets rallied after the introduction of unprecedented fiscal and monetary policy to counter the economic impact of the pandemic.

The most visible transaction in 2020 was General Electric Co., which transferred $1.7 billion of obligations of the U.S. GE Pension Plan to Athene Holding Ltd., in the form of a group annuity contract. The program was offered to participants with a benefit payment less than $360 per month and reduced the plan by around 70,000 participants. Other companies that engaged in similar, but smaller pension de‐risking programs included Unisys Corporation ($1B) and The New York Times Companies ($235MM).

*Source: Pensions & Investments.