Recent Trends In Pension Buyouts And Lump Sum Offers

Law360, New York (March 18, 2015, 12:00 PM EDT) -- Several sponsors of defined benefit plans, also known as pension plans, have taken steps to reduce the size of their pension liabilities since 2012. First, several plan sponsors have executed pension "buyouts" involving the purchase by a defined benefit plan of a group annuity from a life insurer for certain plan participants. The group annuity effectively replaces the plan's obligation to pay benefits to specified plan participants. Second, increasingly sponsors have offered participants lump sums of cash in satisfaction of lifetime benefits....

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