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Charting the course: A framework to evaluate pension de-risking strategies

New pension risk transfer (PRT) research paper prepared by Ernst & Young, LLP (EY), analyzes when insurance and other products make sense as solutions for de-risking pension plans


Newport Beach, Calif. (June 11, 2014)-EY has prepared an in-depth research paper analyzing the various insured and non-insured solutions available to plan sponsors who are interested in managing the volatility of their defined benefit (DB) plans. Pacific Life commissioned the research paper after recognizing the need for an independent review of products and strategies available to plan sponsors.

  • An objective framework was used to evaluate the strategies against a set of predefined corporate objectives; deterministic and stochastic forecasting was used to demonstrate the effectiveness of the strategies to meet the objectives under various economic outcomes.
  • The case study utilizes two DB plans that are currently frozen and underfunded. The plan sponsor's objective is to terminate the plans within five years.
  • Results of the analysis show the ability of the different insured and non-insured solutions to meet the stated objectives. The strengths and weaknesses of each are summarized and quantified given the forecasted external environments.

Pacific Life provides insured solutions to help meet various plan sponsor objectives through a comprehensive suite of PRT insurance products including:

  • Pacific Insured LDI®: A first-of-its-kind alternative to best-efforts liability-driven investing strategies, providing a unique guaranteed match of plan assets to projected plan liabilities with no tracking error.  
  • Pacific Secured Buy-In®: Enables plan sponsors to de-risk their pension obligations and stabilize their corporate balance sheets and income statements without affecting plan termination and without immediately recognizing settlement losses.  
  • Pacific Transferred Buy-Out®: Completely transfers all pension risk and benefit liability from the plan sponsor to Pacific Life on either a partial or full basis.

The research paper and additional information regarding Pacific Life's Pension Risk Transfer products can be found at or by calling the Pension Risk Transfer team at (877) 536-4382.

About Pacific Life
Offering insurance since 1868, Pacific Life provides a wide range of life insurance products, annuities, and mutual funds, and offers a variety of investment products and services to individuals, businesses, and pension plans. Pacific Life counts more than half of the 100 largest U.S. companies as its clients. For additional company information, including current financial strength ratings, visit Pacific Life online at .

Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Client count as of May 2013 is compiled by Pacific Life using the 2013 FORTUNE 500® list.

This material is not intended to be used, nor can it be used by any taxpayer, for the purpose of avoiding U.S. federal, state, or local tax penalties. This material is written to support the promotion or marketing of the transaction(s) or matter(s) addressed by this material. Pacific Life, its distributors, and respective representatives do not provide tax, accounting, or legal advice. Any taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor or attorney.

Insurance products are issued by Pacific Life Insurance Company in all states except New York. Product availability and features may vary by state.

About Ernst & Young, LLP
Ernst & Young, LLP (EY), is a client-serving member firm of Ernst & Young Global Limited operating in the US. EY is a leader in serving the global financial services marketplace. In the Americas, EY is the only public accounting organization with a separate business unit dedicated to the financial services marketplace. Created in 2000, the Americas Financial Services Office today includes more than 4,000 professionals at member firms in over 50 locations throughout the U.S., the Caribbean and Latin America.

Ernst & Young is not affiliated with Pacific Life.