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Regulators Take Notice of Pension De-risking

GAO report criticizes disclosures in lump-sum offers; PBGC to require reporting of de-risking transactions.

By Susan Kelly | Updated on March 18, 2015
More and more companies are eliminating some of the risk involved in their pension plans by purchasing a group annuity to cover future payments to some participants or by offering lump sums to participants. As corporate interest in de-risking grows, regulators are getting interested too.

Last month, a Government Accountability Office (GAO) report prepared at the request of Rep. Sander Levin, D-Mich., criticized the disclosures that companies provide to plan participants who are being offered lump sums. And the Pension Benefit Guaranty Corp. (PBGC) announced last week that it will start requiring companies to report de-risking transactions.

Carol Buckmann, a counsel in the pension and benefits group at law firm Osler Hoskin & Harcourt, also noted a letter sent last fall to the Departments of Treasury and Labor, the PBGC, and the Consumer Financial Protection Bureau by Democratic Senators Tom Harkin of Iowa and Ron Wyden of Oregon urging the agencies to review the effects of pension de-risking.

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