Defined Benefit (DB) Plan Termination Best Practices - Part One
Executive Summary
Having witnessed the impact adverse and volatile equity and interest rate markets have had on their plans, many sponsors of hard-frozen defined benefit (DB) plans continue to search for ways to manage their plan's funded status and for insight on how to ultimately terminate these plans.
But to wind down such plans in a cost-efficient and timely manner requires a well-thought-out strategy. Having a good strategy in place is also crucial to managing the associated financial risks—the ultimate cost of termination and balance sheet liability.
The objective of this white paper is to define "best practices" for developing and implementing a strategy for terminating a hard-frozen plan as soon as reasonably possible, and at the lowest possible cost. The second part of this series, Best Practices for Executing a Termination Strategy, will delve into best practices for executing the termination of a hard-frozen DB plan once the strategy is in place.
Our analysis centers on working effectively with a financial professional and efficiently integrating the plan's actuary and other retirement plan service provider(s) in the termination process.
Special emphasis is placed on:
- Understanding the rules for termination
- Developing a termination strategy by evaluating:
- The cost
- Funding strategies
- The impact of asset allocation
- Carrying out your termination strategy
Get the full report
Download the white paper now (PDF: 784 KB)
