Journey Consulting for Defined Benefit Pension Plans

Defined benefit (DB) pension plans offer a number of advantages over other types of retirement savings programs, especially in terms of providing retirement security for employees. But DB plans also require complexities and related costs that many plan sponsors today find difficult to maintain. Even freezing or closing the plan is not easy.

There are strategic actions that can lower costs today and smooth planned transitions tomorrow.The basic concept is this:

  • The long-term wind-up of a DB plan is a process.
  • While steps in the process can be addressed separately, the absence of a holistic long-term strategy and supporting tactics may result in inadvertent actions that may waste both time and money.

Sibson Consulting refers to this process as the Journey.

 

Journey Consulting

Being prepared to take appropriate actions at the most opportune time is crucial to minimizing risk and controlling costs. These actions include:

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Performing Data Maintenance to verify all plan data’s accuracy to ensure sound decisions moving forward

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Reviewing Plan Design to align retirement benefits with the overall employee value proposition and reviewing plan design modification options

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Considering revised Asset Strategies to manage investment policy, performance, and risk against market volatility

 

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Modeling a Partial Risk Transfer to help reduce costs and risks associated with vested terminated participants

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Planning for a possible Plan Termination to determine the optimal time to move remaining participants into annuities

 

Getting Started

Sibson’s approach starts with an initial review and assessment of a DB plan’s current circumstances to identify its location on the Journey. We then engage with you to determine the preferred end-point and to develop an action plan towards that destination with specific measurements for success along the way.

To learn more about Sibson’s approach to Journey Consulting for DB pension plans;

Download our brochure ›

 

Case Studies

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The Hidden Cost of Bad Data

Company leaders wanted to curb costs by changing the plan’s benefit formula while making sure not to undermine their mission to serve their employees with valued benefits. Unfortunately, data issues within the plan threatened to offset impending savings.

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How Bad Data Can Disrupt a Plan Termination and a Company Acquisition

With an acquisition pending, a healthcare organization found that prior mergers had led to inaccurate pension data that was raising the costs of closing the plans and potentially delaying the acquisition. Resolving the issues led to two streams of cost savings.

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Simplification Through Administration

In an effort to save costs and improve benefits coordination between multiple locations, one company decided to consolidate its benefits administration. In doing so, it became highly evident that in order to enhance the administrative staff’s performance and productivity, there was a need for both significant data cleanup and an updated pension software system.

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