Products April 15, 2014

Firms Offer Pension Risk Transfer Advisory Services

April 15, 2014(PLANSPONSOR.com) – Deloitte and Penbridge Advisors have established a strategic alliance to provide sponsors of U.S. defined benefit pension plans with pension risk transfer (PRT) advisory services.
Reported by

According to Steve Keating, co-founder and principal of Penbridge Advisors, the collaborative adviser offering will deliver highly coordinated advice at each step of the PRT transaction process.

“By combining the complementary, deep PRT experience of our two organizations, the alliance of Penbridge Advisors and Deloitte is well positioned to help plan sponsors objectively address whether and how to pursue PRT,” says Jason Flynn, principal, Deloitte Consulting LLP and national leader of Deloitte’s human capital rewards practice, based in New York. Flynn notes that about $100 billion of corporate pension liabilities was transferred to insurers in the last 30 years, but that a significant portion of the remaining $3 trillion in pension plans is expected to be transferred at a much faster pace over the next five to 10 years.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

The alliance coordinates advisory responsibilities as follows:

  • Penbridge Advisors primarily helps plan sponsors evaluate the cost-effectiveness of annuity buyouts relative to other pension de-risking strategies. Its services include PRT pricing and underwriting assessments, executive and board education, ongoing monitoring of buy-out pricing, and the evaluation and comparison of various insurance products and other de-risking alternatives such as lump sum payouts and liability-driven investing solutions.
  • Deloitte works closely with plan sponsors throughout the annuity placement process, providing comprehensive implementation support. Its services include assistance to plan sponsors with data analysis and cleansing; lump sum payment solicitations; preparation and distribution of annuity provider RFPs and RFIs; analysis of insurers and their offerings; competitive bidding process outsourcing; finalization of annuity contracts and data reconciliation; transition of administration responsibilities; and participant education and communication.

Brad Howard, a senior manager at Deloitte and leader in the firm’s PRT practice, says the combined offering should be a compelling option for plan sponsors of all sizes. 

Deloitte provides a broad range of consulting capabilities across human capital, strategy, operations, innovation and technology.

Penbridge Advisors provides pension plans with information and advisory services on the U.S. pension risk transfer (PRT) market and products. Penbridge provides free access to the industry’s only PRT database, currently used by more than 300 plan sponsors and advisory firms. More information about this database can be found here.

Ask the Experts April 14, 2014

(b)lines Ask the Experts – Correction for Failure to Adopt a Plan Document

April 15, 2014 (PLANSPONSOR (b)lines) – “I am working with a plan sponsor that thought it had executed a 403(b) plan document back in 2008, but all that was actually completed was a draft document that was not executed!
Reported by

“The individual who would have executed the plan document at the time, along with all of his colleagues, have since departed the organization, so I have no idea what happened. Any advice on where we go from here?” 

Michael A. Webb, vice president, Retirement Practice, Cammack Retirement Group, answers: 

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

Failure to execute a 403(b) plan document has been one of the most popular reader questions to Ask the Experts since the columns inception, and we have addressed the issue on two occasions in the column, (see “(b)lines Ask the Experts – Revisiting the Plan with no Signed Document” and “(b)lines Ask the Experts – No Plan Document”).

The only significant development since that time is that the failure to adopt a 403(b) plan may now be corrected via the IRS Voluntary Correction Program (VCP) (see the IRS’ 403(b) Fix-It Guide for details). It should be noted, however, there is a fee to use this program, and the 50% discount that was in place for plan sponsors filing solely to correct a failure to adopt a written 403(b) plan expired on 12/31/2013.

As for our other guidance from the prior articles, most remains relevant, though we have not heard formally from the IRS in some time about the issue of the use of several separate documents that, when taken together, could constitute the adoption of a written plan for 403(b) purposes. Thus, plan sponsors that may have taken this “multiple-document” approach to satisfy the requirements, or that otherwise may not have executed a 403(b) plan document by 12/31/2009, should work with benefits counsel well-versed in such matters to address the issue.

Thank you for your question!

 

NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

«