Achieving $1M in Savings for a Medical Company with a Seamless Pension Plan Termination
Learn how October Three’s collaborative strategy enabled a rapid and cost-effective liability transfer for a medical company in the northeast.
Situation
A prominent medical company in the Northeast U.S. faced rising costs and liabilities from its frozen defined benefit pension plan. By March 2024, the plan was nearly fully funded, and the sponsor aimed to complete termination by year-end. However, a June 2024 actuarial review revealed that termination could not proceed as planned, prompting a need for a revised strategy to transfer liabilities and realize cost savings within the year.
Approach
October Three partnered closely with the plan sponsor and investment advisor to evaluate multiple termination strategies. After thorough analysis, a combined approach—incorporating a Pension Risk Transfer annuity purchase alongside a lump-sum offer—was identified as the most cost-effective and practical solution.
Leveraging their expertise, October Three successfully negotiated favorable annuity placement terms, resulting in $1 million in savings on the transaction.
Results
The plan was ultimately terminated by the end of 2024, benefiting from advantageous assumptions and a streamlined process.
The plan sponsor expressed strong satisfaction with the efficient execution and significant cost savings achieved. This successful termination not only stabilized the company’s financial outlook but also reinforced October Three’s role as a trusted partner in pension risk management.
Achieve Your Risk Management Goals
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.