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Pension risk transfer is a strategy used by employers to shift the financial obligations and uncertainties of defined benefit (DB) pension plans to a third party, typically an insurance company. This process often involves purchasing group annuity contracts to secure retiree benefits, thereby reducing the sponsor’s long-term liabilities and volatility. For retirees, it means that their pension payments may now come from an insurer rather than their former employer, with minimal change to the benefit amount or payment schedule. While this shift can enhance the plan’s security, it’s essential to evaluate the financial strength of the insurer involved. Firms like DIETRICH specialize in facilitating pension risk transfers, ensuring compliance, transparency, and the protection of retiree interests throughout the process.
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