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Every plan sponsor knows that managing a pension can be complex and costly. That's why we developed the Pension Risk Transfer (PRT) Savings Tool to show the potential savings and benefits associated with transferring pension risk. It offers a detailed breakdown of the expenses of shifting pension obligations, enabling users to make informed decisions about their retirement plans.
What the tool analyzes
The tool provides a detailed analysis for your pension plan. Here’s what you’ll see:
Plan funding status: Shows the current funding level of the pension plan — the ratio of the plan's assets to its liabilities. If the plan is well-funded, the cost of transferring the risk might be lower than for an underfunded plan.
Projected liabilities: Uses actuarial calculations to estimate the future pension obligations the employer will need to meet. This projection is crucial in determining the potential savings from a PRT transaction.
Market conditions: Considers prevailing market conditions, including interest rates and investment returns. These factors can significantly impact the cost of a PRT transaction.
Why should you use the tool?
Cost savings: The tool calculates the potential annual savings by comparing the ongoing costs of managing the pension plan in-house versus the expenses associated with PRT.
Financial viability: Based on the provided data, it evaluates the feasibility of a PRT transaction. It may highlight cases where a transfer might be cost-effective and instances where it may not be in the best interest of the company or plan participants.
Decision-making support: Armed with the comprehensive analysis, users can make informed decisions about the best course of action for their pension plan. It empowers them to choose the most appropriate risk management strategy based on their financial goals and risk tolerance.
Risk mitigation: It can help employers reduce the financial risks associated with managing a pension plan, which often includes potential market fluctuations and longevity risk (the risk of plan participants living longer than anticipated).
User-friendly interface: The tool is designed to be user-friendly, making it easy for individuals and companies to navigate through the process. Users are asked to enter their Employee Identification Number (EIN) and plan number, or they have the option to look up their company by name — making the process simple and hassle free.
Click here to try the tool now and see how much your company could save!