More than 1 million defined benefit plan participants were affected by derisking activity between 2009 and 2013, said a PBGC study released Thursday.
Actuaries at the Pension Benefit Guaranty Corp. analyzed Form 5500 data for 3,590 plans with at least 1,000 participants and found that 534 plans, or 15%, appeared to have transferred risk in some way between 2009 to 2013. The average drop in participant count was 18%.
Of those 534 plans, 381 involved lump-sum payments and the rest were annuity purchases.
The study concludes the plan sponsor's financial condition or union status didn't determine risk transfer activity.
The largest group by asset size to derisk was plans with $100 million to $250 million, where 131 plans transferred risk, followed by 122 plans with up to $50 million in assets. Only 50 of the 534 plans were involved in immediate standard plan terminations, but those were concentrated in the largest plans.
The PBGC said in a statement the actual number of risk transfers probably was higher because the actuaries were cautious about declaring a pattern in the data. The agency has started collecting data on each pension plan’s risk transfer history, which is expected to more accurately determine patterns. Derisking activity reduces the agency’s premium base.
