U.S. corporate defined benefit plan executives continue to show considerable interest in pension risk transfer transactions, a new survey from the LIMRA Secure Retirement Institute shows.
For the institute's 2018 survey of corporate plan executives, the results of which were just released, 44% said they are very interested in PRT transactions in the new survey, compared with 42% in the previous survey in 2016, and 35% show they are somewhat interested, compared with 39% in 2016.
In the first survey conducted in 2014, only 32% surveyed said they were very interested, while 47% said they were somewhat interested, 11% said they were slightly interested and 10% said they were not interested at all.
Among executives in the 2018 survey, 13% said they are slightly interested, up from 11% in 2016 and only 8% said they are not at all interested, the same as in 2016. Among those who say they are not interested in PRT, 42% say they address their liability risks through alternative means, while about 3 in 10 cite the high cost of annuity purchases and another 3 in 10 say they don't know enough about PRT transactions.
Among executives whose DB plans are still active, 39% said they are very interested in PRT transactions, indicating an opportunity in the market beyond the traditional path of freezing a DB plan to benefit accruals before considering purchasing group annuity contracts from insurance companies to transfer plan liabilities, according to a report on the survey.
Among those surveyed who have both a defined benefit and defined contribution plan, 46% have frozen their DB plans.
LIMRA surveyed decision-makers for 241 U.S. corporate defined benefit plans.
Information on the survey is posted on LIMRA's website.