Annuity purchase is now a promising option for pension de-risking, Mercer says

12/20/2013 | PlanSponsor.com

Sponsors of defined benefit pension plans should seriously consider annuity purchases to de-risk their plans, the consulting firm Mercer said in a report. According to Mercer, the cost of purchasing an annuity can be comparable to the cost of keeping these retirees in a DBP. "Transferring these retiree liabilities to an insurer removes considerable volatility from the balance sheet and income statement. The improvement in funded status has resulted in annuity purchases being much more attractive," this article concludes.

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