Financial Professionals Retirement Pension risk transfer
Pension risk transfer
Employee benefits continued with limited employer risk.

Employers want to meet their pension plan obligation but doing so can be challenging. For some, the administrative expenses, unpredictable rates, and changing business structures can make it too risky or too costly. Explore how and when a pension risk transfer may help.

Learn how our patent-pending Principal® Pension Risk Transfer Strike Pricing can result in significant savings.

The traditional pension risk transfer process lacks flexibility and control, which in turn potentially causes significant risk and volatility in costs. See how we can help address these challenges.

What is a pension risk transfer?

A pension risk transfer (PRT) is the process of transferring a defined benefit plan’s risk away from an employer who sponsors a pension plan. The two most common types of PRT are employers offering participants a lump sum payout and employers purchasing a group annuity from an insurance company.

Is a pension risk transfer solution a good option?

Pension risk transfers can benefit organizations looking to reduce the financial risk associated with their defined benefit pension plan. At the same time, this can help organizations keep their commitment to provide pension benefits to applicable current and past employees. With a pension risk transfer solution, plan sponsors replace their current defined benefit plan for a single premium group annuity.

When to consider a pension risk transfer?

Here are some of the many reasons an organization might consider a pension risk transfer:

  • Termination of a defined benefit pension plan. The plan sponsor purchases a group annuity contract from us, then we provide benefits to plan participants and their beneficiaries.
  • A merger, acquisition, or sale of an organization. If the acquiring organization decides to discontinue a defined benefit plan, they can purchase a group annuity to continue benefits earned by participants of the acquired organization.
  • Lift-out. An employer can purchase a group annuity for retired and/or terminated vested participants.
  • It helps if an employer understands any post-placement impacts to the plan and avoid late surprises in the process.
Choosing Principal® for a pension risk transfer

When choosing to transfer the risk of a pension plan to Principal, we’ll work to help implement and manage a pension risk transfer solution. As a leader in this market, we bring over 80 years of experience in the pension risk transfer business. And with an experienced staff solely dedicated to group annuity, we service more than 5,100 clients of all sizes in the pension risk transfer market across a wide range of industries. We understand each plan situation is unique—we’re ready to customize a solution to help meet each employer’s needs.

Discover our capabilities
Additional capabilities

Timely benefit payment services

  • Installation and contract writing services
  • Ongoing administrative services
  • Multiple payment dates
  • Stop payment and reissuance of checks usually within 48 business hours
  • Electronic funds transfer (EFT)
  • State, federal, and foreign tax reporting and withholding
  • Customized deductions

Dedicated internet and phone services

  • Hearing impaired and non-English phone services
  • Documented tracking services of calls
  • 24/7 online payment viewing and account service
  • Online access to tax forms

Proprietary technology

  • Records management and storage
  • Adaptive authentication for our secure website

Still have questions?

If you are a financial professional or consultant wanting to discuss a pension risk transfer solution, reach out to us by phone 877-492-9830  Monday through Friday 7 a.m. to 5 p.m. Central time or email pfgspquote@exchange.principal.com. We're here to help you make an informed decision.

If you are an individual currently receiving a pension benefit and would like account information, reach out to us by phone 800-247-7011  Monday through Friday 7 a.m. to 5 p.m. Central time.

Footnotes

Our patent pending technology relates, in part, to the technology to provide incremental daily Pension Risk Transfer (PRT) pricing. Plan sponsors are still responsible for the due diligence of related PRT pricing and acting on applicable quoted pricing. If you’re working with a client to coordinate a plan termination, there’s a specific timeline for taking action. Keep these requirements in mind (PDF)  as you develop your transfer schedule. #4 Pension risk transfer provider. Based on total PRT assets, LIMRA Secure Retirement Institute, as of Dec. 31, 2021. Principal Financial Group, as of 9/30/2021. Our patent pending technology relates, in part, to the technology to provide incremental daily Pension Risk Transfer (PRT) pricing. Plan sponsors are still responsible for the due diligence of related PRT pricing and acting on applicable quoted pricing.

The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, investment, or tax advice. You should consult with appropriate counsel, financial professionals, and other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.

Guarantees are based upon the claims-paying ability of the issuing insurance company.

Insurance products and plan administrative services provided through Principal Life Insurance Company®, a member of the Principal Financial Group®, Des Moines, Iowa 50392.

Principal®, Principal Financial Group® and the Principal logo design are registered trademarks of Principal Financial Services, Inc., a Principal Financial Group company, in the United States and are trademarks and service marks of Principal Financial Services, Inc., in various countries around the world.