DOL may review ‘derisking’ pension risk transfers, says congressional report
July 16, 2024 by Doug Bailey
A recent Department of Labor report to Congress reaffirming current fiduciary standards for selecting annuity providers in defined benefit pension plans also includes notice that it may review the increasingly common, and controversial, practice of companies transferring pension risks to life insurers, commonly known as “derisking.”
The report by the DOL’s Employee Benefits Security Administration (EBSA), which was mandated by 2022’s SECURE 2.0 Act, reviews its 1995 Interpretive Bulletin 95-1 that outlined the responsibilities of fiduciaries under the Employment Retirement Income Security Act (ERISA).
EBSA essentially reported that the guidelines for evaluating an annuity provider’s ability to pay claims and their creditworthiness are still relevant and there’s no immediate need for any updates or changes.
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