General Motors took a more drastic approach to managing the risks involved in defined-benefit pensions when it announced recently that it will offer lump-sum buyouts to salaried retirees and transfer the management of its active pension plans for salaried retirees to Prudential Financial.

The company's aim is to reduce the size of its overall pension assets and liabilities, Waite says. Because GM has a huge pension plan, “they may view it as they're getting penalized for having the potential for so much volatility to their balance sheets coming from these pension plans,” he says, noting that if GM shrinks its pension plan, it should have less year-to-year volatility and a more stable balance sheet.

GM's pension is larger than most companies' plans, and the changes it is making are not a route the typical U.S. pension plan sponsor will want to take, Waite says. He notes that with U.S. interest rates so low, it's expensive to offer lump sums and buy insurance contracts.

But many plan sponsors are still looking at how to manage their plans, evaluating their risk and de-risking plans when possible.

With interest rates low, companies increasingly are turning toward liability-driven investing (LDI), Waite says. “They're looking at much more customized and complex interest-rate-hedging strategies within the pension, and what they're also looking at is what the proper level of risk is today and going forward.”