Integrated Team, Proactive Approach

Transferring pension liabilities to participants or insurance companies can significantly reduce a plan’s impact on the balance sheet, income statement, and required contributions. It also helps mitigate funded status volatility and lowers Pension Benefit Guaranty Corporation (PBGC) premiums. However, implementing the right strategy requires careful planning and coordination.

At USI Consulting Group, our cross-disciplinary team of actuaries, annuity consultants, and investment advisors collaborates with plan sponsors to evaluate their unique circumstances and goals. This integrated approach ensures strategies are technically sound and aligned with broader financial objectives. Unlike siloed consulting models, our coordinated methodology often results in greater savings and more effective outcomes.

Tailored Solutions for Every Plan

There is no one-size-fits-all de-risking strategy. Each organization’s ideal approach depends on its risk tolerance, budget, timeline and long-term goals.

Key strategies include:

	Liability-Driven Investing (LDI): Aligns investment strategies with the plan’s liability profile to reduce funded status volatility and improve predictability.
	Lump Sum Windows and Retiree Buyouts: Offering lump sums or purchasing annuities for retirees can reduce plan size, administrative burden and longevity and interest rate risk.
	Glide Path Implementation: A dynamic asset allocation strategy that adjusts as funded status improves, helping sponsors lock in gains and reduce equity exposure.
	Plan Design Changes: Modifying benefit formulas, freezing plans or shifting to hybrid designs can reduce future accruals and long-term liabilities.
	Full Plan Termination: For sponsors ready to exit DB obligations, a well-orchestrated termination strategy including annuity purchases and regulatory filings is essential.

Many sponsors benefit from a tailored combination of strategies such as annuity purchases, lump sum windows and LDI developed through integrated actuarial and investment expertise.

However, it’s important that plan goals drive the strategy.  A well-designed de-risking strategy can help plan sponsors:

	Lower PBGC premiums by reducing participant counts
	Reduce liability growth by lowering total plan obligations
	Stabilize funding patterns by aligning fixed income assets with benefit liabilities
	Develop predictable contribution strategies that support long-term goals

Whether the objective is to reduce balance sheet exposure, stabilize contributions or prepare for plan termination, we bring deep expertise and a strategic lens to every engagement.

Key Questions to Ask Before De-risking

• What is our current funded status, and how has it changed over time?
• What are our long-term objectives for the pension plan?
• How does our workforce demographic impact our risk profile?
• What is our tolerance for investment risk?
• Have we evaluated the cost and timing of annuity purchases?
• Are we prepared for the administrative and regulatory steps involved?