By Douglas Appell
Source: Pensions & Investments
Outsourced CIOs reporting a growing number of pension risk transfers by defined benefit clients they’ve guided to full funding could be forgiven for looking at the DB portion of their businesses as a wasting asset.
Instead, a number of executives see a chance that the ripple effects of IBM’s decision last November to put its multibillion-dollar pension plan surplus to work — reopening its DB plan while ending the company’s 401(k) match — could breathe new life into a corporate DB segment long seen as a dinosaur on the road to extinction.
For now, while that prospect remains mostly a matter of conjecture, at a minimum the repositioning of IBM’s retirement program has succeeded in shattering the singular focus corporate DB plan sponsors had maintained in recent years on pension risk transfers.
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