Pension De-Risking and What It Means for Retirees: A Primer

Several large companies, including Lockheed Martin and 3M, made big contributions to their pension plans in the first month of 2018.

As the companies have increased their contributions, they’ve also moved the plans closer to being fully funded. The closer the plans get to being fully funded, the easier it could be for the companies to unload their pension liabilities through “de-risking.”

Pension de-risking can take different shapes. One is when an employer buys a group annuity contract, typically from insurance giants like Prudential Life, Metropolitan Life Insurance Co., Massachusetts Life Insurance Co., and Principal Financial. This type of de-risking ...