Pension De-Risking: Perspectives for Multiemployer, Public Plans

Funding a pension plan has become an increasingly challenging and complex undertaking in recent years, due primarily to shifting demographics, an investment environment that is more volatile than ever before, and an overall trend away from defined benefit plans towards defined contribution plans. To reduce a pension plan’s vulnerability to investment fluctuations and stabilize plan funding obligations, many pension plan sponsors, particularly corporate sponsors of single-employer plans, have for many years explored and used a variety of “de-risking” strategies. Because they are the sole sources of funding for these plans, single-employer plan sponsors have embraced de-risking strategies.

Unfortunately, the same ...