Pensions - Articles - Pension de-risking trend continues with Kimberley-Clark


Kimberly-Clark Corporation’s recent announcement that it will purchase group annuity contracts for about 21,000 retirees representing $2.5 billion in pension obligations is the latest indication that the trend to de-risk pension plans is continuing.

 According to experts at global professional services company Towers Watson plan sponsors are most apt to consider de-risking solutions that allow effective risk management of defined benefit plans while also maintaining benefit security to plan participants.

 “This transaction continues a measured trend towards thoughtful pension de-risking,” said Mike Archer, senior retirement consultant at Towers Watson. “While many plan sponsors are taking different routes toward the end goal of lowering risk, they are focused on taking a responsible path towards the protection and support of retirees’ long-term benefits.”

 The announcement by Kimberly-Clark comes at a period when pension de-risking activity remains very high. Total annuity purchase market activity during 2014 was $8.7 billion. Towers Watson also sees many organizations considering voluntary lump sum programs and supported over 100 organizations in implementing these programs during 2014.

 Towers Watson served as the strategic insurance and actuarial adviser to Kimberly-Clark on the transaction.

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