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A global chemical corporation faced rising costs and liabilities from its frozen defined benefit (DB) pension plan, primarily composed of retirees and beneficiaries. The plan’s unusual provisions and an outdated insurance contract complicated termination efforts, presenting significant challenges for the company.
October Three conducted a proprietary “Wellness Report,” analyzing the plan’s history, current status, and future risk management options. This detailed assessment identified the plan as a strong candidate for pension risk transfer. Working closely with the plan’s actuary and sponsor, October Three developed a clear termination strategy and timeline, incorporating ongoing communication and periodic reviews to adapt as circumstances evolved.
To minimize financial exposure, October Three advised the sponsor to set a firm deadline for obtaining the IRS Determination Letter, avoiding additional costs caused by changing assumptions and bond rates. Recognizing the company’s paternalistic culture, the team prioritized participant education, delivering onsite and virtual meetings to ensure clear, confident communication throughout the transition.
October Three completed the liability transfer in under 12 months, exceeding the sponsor’s expectations for both speed and efficiency. Expert consulting and strategic risk management saved the client $8 million. The transition to a highly qualified insurance company was seamless, maintaining participant trust and satisfaction throughout the process.
Pension risk transfer offers businesses a way to reduce financial risk, simplify administration, and focus on core business activities to improve financial position and operational efficiency. Schedule a quick call today to learn how October Three can help transfer your pension plan risk.