1

Analysis of Single-Employer 

Pension Plan Partial Risk Transfers

(Based on Risk Transfer Data Reported in the 2015-

2018 PBGC Premium Filings)

October 2020
i

Contents

Summary ............................................................................................................................................. 1

Background.......................................................................................................................................... 2

Reported Results ................................................................................................................................. 2

System-Wide .............................................................................................................................................2

Plan Characteristics...................................................................................................................................4

Potential Consequences for PBGC ........................................................................................................ 7

Flat-Rate Premium Income .......................................................................................................................7

Variable-Rate Premium (VRP) Income ......................................................................................................8

Change in PBGC’s Risk Profile ...................................................................................................................9

Data Availability, Limitations, and Adjustments................................................................................. 10

Information Collected .............................................................................................................................10

Participant Count Adjustments...............................................................................................................11

Data Excluded .........................................................................................................................................11

Manual Adjustments...............................................................................................................................11

Conclusion ......................................................................................................................................... 11

Tables

Table 1 – Total Number of Plans Performing Partial Risk Transfer Activities from 2015-2018....................2

Table 2 - Total Number of Participants in Partial Risk Transfer Activities from 2015-2018.........................3

Table 3 – Plan and Participant Counts Categorized by Plan Size..................................................................5

Table 4 – Plans Performing RTAs Based on Status at VRP Cap.....................................................................8

Figures

Figure 1 – Type of RTAs Performed by Small and Large Plans......................................................................4

Figure 2 – Percentage of Plans Performing RTAs by Plan Participant Count................................................5

Figure 3 – Percentage of Frozen Plans Among All Plans vs Plans with RTAs from 2015-2018.....................6

Figure 4 – Percentage of Plans Performing RTAs by Plan Size and Frozen Status........................................6

Figure 5 – Percentage of Large Plans Performing RTAs by Industry.............................................................7

Figure 6– Percentage of Large Plans Performing RTAs by Risk Classification ............................................10
1

SUMMARY

PBGC first required single-employer pension plans to report Risk Transfer Activity (RTA) on the 2015 

Comprehensive Premium Filing. This report examines risk transfer data reported on PBGC premium 

filings from 2015 through 2018. The information reported includes the number of pension plans that 

engaged in risk transfer activities and the number of participants affected by these activities (i.e. the 

number of participants who received a distribution from their pension plan in the form of a lump sum cash 

out or an annuity purchased from a private insurance company). The participants who received a cash 

out distribution or an annuity no longer have accrued benefits in their pension plans and thus, are no 

longer covered by PBGC insurance. The risk transfer data reported to PBGC does not include the amount 

of liabilities transferred as part of the RTA.

Risk transfers are one of the methods used by plan sponsors to reduce the financial risks associated with 

sponsoring a defined benefit pension plan. Risk transfer transactions reduce some or all the pension plan 

liability and risk by offering lumpsum options to participants or by purchasing annuities from insurance 

companies to provide participants’ promised benefits. 

Further information on RTA data collected from PBGC premium filings can be found in PBGC's 2018 Data 

Tables. 

Major Findings:

• 8.0 percent of PBGC-covered plans performed an RTA during the 2015-2018 study period.

• 44.8 percent of large plans (greater than 1,000 participants) performed an RTA during the study 

period.

• 92.6 percent of plans that performed an RTA during the study period provided a lump sum option,

compared to only 18.8 percent of plans that opted to purchase annuities.1

• 2.4 million participants received either a lump sum distribution or an annuity as part of a risk 

transfer transaction during the study period, and thus are no longer participating in their pension 

plan or covered by PBGC insurance. These participants represent 7.9 percent of the 30.9 million2

participants in PBGC-covered plans during the 2014 plan year.

• 63.0 percent of all participants affected by an RTA during the study period received a distribution 

from their plan through the election of a lump sum. 

• Plans paying PBGC’s Variable-Rate Premiums (VRPs) at the per-participant cap were three 

times as likely to perform an RTA during the period as all other plans (i.e. those paying a lower or 

no VRP). 

• Plans sponsored by financially weak companies (i.e. plans that PBGC considers reasonably 

possible to terminate) performed RTAs at similar rates to other plans.

1

Some plans offered lump sums and purchased annuities during the period. Since RTAs are not mutually exclusive, 

the sum of plans offering lump sums or purchasing annuities does not equal 100%. 

2 30.9 million participants in 2014 plan year as reported in PBGC’s data tables: https://www.pbgc.gov/prac/databooks
2

Background 

Pension plans perform an RTA by offering lump sum options to participants or by purchasing annuities 

from insurance companies. When plans perform an RTA, PBGC’s premium filing instructions3require 

plans to report the type of RTA performed and number of participants affected. 

Lump sums paid in the course of routine plan operations, in conjunction with a plan termination, upon a 

participant’s separation from service, under mandatory cash-out provisions, or as part of an incentive 

program to encourage participants to retire early are not considered RTAs. Annuity purchases made 

during routine plan operations, in conjunction with a plan termination, or that remain in the plan as a “buyin” are also not considered RTAs. 

The reduction in the plan participant population through RTAs represents a loss of future premium income 

to PBGC, but the reduction in plan liabilities can also reduce future insurance claims to PBGC. The dollar 

value of future premium income losses and potential gains through reduced insurance claims is difficult to 

measure, but this report presents some factors to consider regarding the impact of RTAs on the SingleEmployer Insurance Program.

Reported Results

System-Wide

The table below summarizes the number of single-employer plans reporting risk transfers from 2015 

through 2018.

Table 1 – Total Number of Plans Performing Partial Risk Transfer Activities from 2015-2018

Risk Transfer Activity 20154 2016 2017 2018

Total 2015-

2018

5

Plans Offering Lump Sums 960 585 768 447 2,290

Plans Purchasing Annuities 91 76 159 213 466

Plans Performing any RTA6 1,024 643 891 623 2,473

3 PBGC’s annual Comprehensive Premium Filing Instructions are available at pbgc.gov/prac/prem/premium-filingpayment-and-instructions.

4 Risk transfer reporting on the 2015 premium filing covered a period of approximately 19.5 months. 

5 The total number of plans reporting an RTA from 2015-2018 is not the sum of the plans reporting an RTA in each 

year, because some plans performed an RTA in multiple years and as such were not double counted in the total 

column.

6

Some plans offered lump sums and purchased annuities in the same year, so the number of plans performing any 

RTA does not equal the sum of plans offering lump sums and purchasing annuities. 
3

The table below summarizes the number of participants in single-employer plans involved in risk transfers 

from 2015 through 2018.

Table 2 – Total Number of Participants in Partial Risk Transfer Activities from 2015-2018

Risk Transfer Activity 2015 2016 2017 2018 Total

Lump Sums

Terminated Vested Participants 

Offered Lump Sums 1,299,783 651,902 819,496 442,001 3,213,182

Terminated Vested Participants 

Electing Lump Sums 639,609 304,106 368,232 186,220 1,498,167

Retired Participants Offered 

Lump Sums7 76,683 31,5228 N/A N/A 108,205

Retired Participants Electing 

Lump Sums 30,373 12,124 N/A N/A 42,497

Annuity Purchases

Annuities Purchased for 

Terminated Vested Participants 1,669 2,746 2,030 3,498 9,943

Annuities Purchased for 

Retirees 74,947 167,651 251,637 399,618 893,853

Total Number of Participants 

Removed from the SingleEmployer Program746,598 486,627 621,889 589,336 2,444,460

This study does not examine standard terminations (termination of fully funded plans in their entirety via

close out by purchasing annuities or paying lump sums in satisfaction of all plan benefit liabilities). It is 

helpful, however, to compare the number of plans and participants affected by partial risk transfers versus 

standard terminations. Approximately 5,100 plans, covering approximately 690,000 participants, made 

final distributions in a standard termination between January 1, 2014 and August 16, 2018, roughly the 

same period covered in this study (see Information Collected below). The number of terminated plans 

during the period was more than double the number of plans performing a partial RTA but affected less 

than 30% of the number of participants. This suggests that standard plan terminations are prevalent 

among smaller plans but are not as big of a factor in the total reduction of participants in PBGC-insured 

pension plans. 

Across the four-year study period, plans showed a proclivity for offering lump sums as a form of risk 

transfer over purchasing annuities. Ninety-three percent of plans with RTAs employed a lump sum offer, 

compared to nineteen percent that purchased annuities. However, there was a shift in 2018 towards 

7

IRS Ruling 2015-49 proposed an amendment to Section 401(a)(9) of the Code to disallow replacing in-pay 

annuities with lump sums, with certain exceptions for plans that had taken steps towards offering a lump sum 

window prior to that date. Therefore, in-pay lump sum reporting was removed from the premium filing 

instructions after 2015. The IRS subsequently announced in Ruling 2019-18 that it would not make such an 

amendment and thus, plans may resume offering lump sums to retired participants. 

8 One large plan’s reported lump sum offers and elections on the 2016 premium filing included lump sums to both 

retirees and terminated vested participants, since they had taken steps towards offering a lump sum window to 

retirees prior to IRS Ruling 2015-49. The number of retiree lump sum offers and elections by that plan are included 

in the 2016 data, even though retiree lump sum reporting was no longer an option on the 2016 premium filing. 
4

annuity purchases. The proportion of plans with RTAs that employed a purchased annuity in 2018 was up 

to thirty-four percent. 

Figure 1, on the next page, shows the number of small (fewer than 1,000 participants) and large (greater 

than or equal to 1,000 participants)9 plans that offered lump sums to terminated vested (TV) participants, 

the number of plans that purchased annuities (to TV participants, retirees, or both), and the number of 

plans that offered lump sums and purchased annuities from 2015-2018. 

Figure 1 – Both Small and Large Plans Offered More Lump Sum Options Than Annuity Purchases

As shown in Figure 1, lump sum offers are the most common form of RTA. However, lump sum offers are 

subject to a participant’s election, whereas an annuity purchase is not. As a result, sponsors know with 

certainty the number of participants who will leave the plan when making an annuity purchase. The planweighted average participant removal from lump sum offers during the period was 13.1%, compared to 

25.9% for purchased annuities. 

Plan Characteristics

The reported risk transfer data shows that, in aggregate, a relatively small number of plans performed an 

RTA during the 2015-2018 period.

10 However, as shown in Figure 2, a greater proportion of large plans11

performed RTAs than small plans. The idea that large plans are more likely to perform RTAs than small 

plans was supported with statistical testing.

9 When analyzing plans by size over the period from 2015-2018, plans were categorized by their largest participant 

count during the period.

10 Some plans reported RTAs in more than one year from 2015-2018. Such plans were only counted as one unique 

plan that performed an RTA when analyzing plan incidence rates during the period. 

972 1,035

95 83 88

200

0

200

400

600

800

1,000

1,200

Fewer than 1,000 Participants 1,000 or more Participants

Number of Plans

Plan Size

Type of RTA Performed by Plan Size

Lump Sums Only Purchased Annuities Only Lump Sums & Purchased Annuities
5

Figure 2 – A Greater Proportion of Large Plans Performed RTAs than Small Plans

Although the number of small plans dwarfs that of large plans, large plans represent most of the 

participants and liabilities in plans covered by PBGC’s Single-Employer Program, as well as the majority 

of participants who leave their plans through RTAs.

Table 3 below shows the number of plans and participants by size category during the 2015-2018 period. 

Table 3 – Plan and Participant Counts Categorized by Plan Size12

Plan Size

Number of Participants

Less 

than 100 100 – 499 500 – 999

1,000 –

2,499

2,500 –

4,999

5,000 –

9,999

10,000 or 

more

All Plans 22,991 3,792 1,167 1,273 662 473 548

Plans with RTAs 200 608 342 486 305 237 295

Participants in 

All Plans 442,468 1,136,237 857,335 2,129,559 2,446,405 3,426,163 21,366,112

Participants 

Removed 

through RTAs 2,247 33,679 46,507 143,992 189,331 315,443 1,713,261

% of All RTA 

Participants 

Removed 0.1% 1.4% 1.9% 5.9% 7.7% 12.9% 70.1%

12 Plan and participant counts are based on unique counts reported on PBGC premium filings during the 2015-2018 

period. Since not all plans that submitted filings during the period submitted filings in all three years, the total 

number of plans and participants from 2015-2018 will exceed the number of plans and participants reported in any 

individual year.

0.9% 16.0% 29.3% 38.2% 46.1% 50.1% 53.8%

0%

20%

40%

60%

80%

100%

Fewer than 100 100 - 499 500 - 999 1,000 - 2,499 2,500 - 4,999 5,000 - 9,999 10,000 or more

Percentage of Plans with an RTA

Plan Size

Percentage of Plans Performing an RTA by Plan Size
6

A plan’s frozen status may also be a factor in whether it performs an RTA. While plans with an accrual 

and/or participation freeze (full or partial) represent less than a third of all plans in the 2015-2018 period, 

they comprise three fourths of the plans that performed an RTA.

Figure 3 – Plans Performing RTAs are More Likely to be Frozen than the General Population of Plans

Comparing RTA rates by frozen status and plan size shows that large plans have performed more RTAs 

than small plans regardless of frozen status, and that within each plan size category, frozen plans have 

performed RTAs at a higher rate than non-frozen plans. 

Figure 4 – Frozen Plans Performed RTAs at a Greater Rate than Non-Frozen Plans, Regardless of Size

The orange and blue bars in the chart above represent the percentage of plans, within the specified plan 

size and frozen status, that performed an RTA from 2015-2018. For example, of the 236 non-frozen plans 

with 10,000 or more participants, 107 (45 percent) performed an RTA. However, of the 312 frozen or 

partially frozen plans with 10,000 or more participants, 188 (60 percent) performed an RTA.

Frozen 

30.8%

Non-Frozen 

69.2%

All Plans

Frozen 

75.5%

Non-Frozen 

24.5%

Plans with RTAs

60%

45%

55%

36%

51%

34%

40%

32%

31%

24%

20%

9%

3.0%

0.4%

0% 10% 20% 30% 40% 50% 60% 70%

10,000 or more

5,000-9,999

2,500-4,999

1,000-2,499

500-999

100-499

Fewer than 100 Number of Participants

Percentage of Plans with an RTA by Plan Size and Frozen Status

Non-Frozen Frozen
7

Another dimension on which RTA incidence rates vary is by the sponsor’s industry. For example, 18.1

percent of Manufacturing plans performed an RTA between 2015-2018, compared to only 4.9 percent of 

plans in the Finance, Insurance, & Real Estate industry. However, a greater proportion of Manufacturing 

plans are large plans as compared to the Finance, Insurance, & Real Estate industry. RTA incidence 

rates by industry are less disparate when looking at large plans only. Among large plans, 49.4 percent of 

Manufacturing plans performed an RTA compared to 42.6 percent of Finance, Insurance, & Real Estate

plans. The RTA incidence rates by industry among large plans are presented below. 

Figure 5 – A Significant Percentage of Large Plans Performed RTAs Regardless of Industry

Potential Consequences for PBGC

Flat-Rate Premium Income

Single-Employer pension plans pay a flat-rate premium for each participant in the plan. The flat-rate 

premium rate is indexed to changes in the National Average Wage Index. For 2019, the flat-rate premium

was $80 per participant. For illustrative purposes, assuming participants leaving the Single-Employer 

Program through RTAs would not have left the system by some other cause, the 2,444,460 participants 

removed through RTAs from 2015-2018 (see Table 2) represent a flat-rate premium income loss to PBGC 

of $196 million for the 2019 premium payment year. This represents 8.7% of the $2,236 million flat-rate 

premium income PBGC’s Single-Employer Program is estimated to receive from plans for the 2019 

premium payment year13.

However, there are other factors to consider when projecting flat-rate premium income loss from RTAs. 

Participants removed from the system through RTAs would have eventually left the system by some other 

13 Estimated flat-rate premium income for the 2019 premium payment year is based on actual premium receipts 

through August 2020 and estimated premium receipts based on the prior year’s premium payment pattern. 

34.0% 49.4% 43.0% 43.1% 54.1% 49.4% 42.6% 40.3% 28.9%

0%

20%

40%

60%

80%

100%

Agriculture,

Mining, &

Construction

Manufacturing Transp.&

Public Utilities

Information Wholesale

Trade

Retail

Trade

Finance,

Insurance &

Real Estate

Services Non-Profit

Org's

Percentage of Large Plans Performing RTAs by Industry

Plans with RTAs Plans without RTAs
8

reason, so the flat-rate premium income lost due to a participant’s removal is not an annual loss in 

perpetuity. Participant counts in single-employer plans are reduced for other non-RTA reasons, such as 

mortality, election of a lump sum or an annuity purchase not associated with an RTA, and plan 

termination.

Plan incidence and participant removal rates through RTAs reported from 2015-2018 may not remain 

steady in the future. Some factors that could impact RTA incidence rates in the future include pension 

liability discount rates, annuity pricing, PBGC premium rates, plan funding levels, and a smaller pool of 

participants after an RTA has already been performed. 

Variable-Rate Premium (VRP) Income

In addition to the flat rate premium, underfunded single-employer pension plans pay a variable-rate 

premium based on the amount of the plan’s underfunding, up to a cap based on the plan’s participant 

count. The VRP rate is indexed to changes in the National Average Wage Index. For the 2019 premium 

filing year, the VRP rate was $43 per $1,000 of unfunded vested benefits, with a cap of $541 per 

participant. 

Reducing the VRP may be a factor in a sponsor’s decision to perform an RTA, particularly if the plan is 

paying VRPs at or near the per-participant cap. Plans paying premiums at the VRP cap performed RTAs 

at a greater rate, proportionally, than all other plans (i.e. plans paying a lower no VRP). 

Table 4 – Plans Performing RTAs Based on Status at VRP Cap

Year

Plans at VRP Cap

Plans paying no VRP or

less than the VRP Cap

Total Count RTA Count % Total Total Count RTA Count % Total

2015 1,448 137 9.5% 22,870 886 3.9%

2016 2,036 130 6.4% 22,660 513 2.3%

2017 2,165 240 11.1% 22,719 651 3.0%

2018 2,029 168 8.3% 23,054 454 2.0%

Plans paying VRPs at the per-participant cap performed RTAs at a rate more than three times greater

than all other plans (8.79 percent vs 2.74 percent from 2015-2018). However, VRPs appear to be more 

impactful on a small plan’s likelihood of performing an RTA than a large plan. While small plans at the 

VRP cap performed RTAs at a rate approximately four times greater than all other small plans (5.70

percent vs 1.43 percent), incidence rates among large plans were relatively unaffected by the VRP cap 

(19.69 percent vs 17.46 percent). 

The impact of RTAs on PBGC’s VRP income is not easily determined, since a plan’s underfunding (and 

subsequent VRPs) are determined by factors not directly related to the RTA. However, one source of 

rough estimation is the participant reduction in plans paying the per-participant VRP cap. Using the 

simplified assumption that plans paying the VRP cap in the year in which they performed an RTA will 

continue to pay the cap in the subsequent year (and would have continued to pay the cap had they not 

performed an RTA), the VRP income lost from those plans will roughly equal VRP cap multiplied by the 

number of participants removed through an RTA. 

According to 2018 premium filings, 168 plans that were paying the VRP cap performed an RTA, removing 

a total of 117,050 participants. Using the simplified assumption above, those 117,050 participants 

represent a “loss” of premium collections of $63 million, based on the $541 per-participant VRP cap 
9

applicable to the 2019 premium filing year. This represents only 1.3% of the $4,77414 million VRP income 

PBGC’s Single-Employer Program is estimated to receive from plans for the 2019 premium payment 

year. However, not all plans performing RTAs are currently at the VRP cap. It is possible that the removal 

of participants through RTAs could cause a plan not at the VRP cap to hit the cap, resulting in additional 

lost income for PBGC. Thus, the $63 million income loss from the simplified calculations of plans currently 

at the VRP cap may represent only a portion of total VRP loss due to RTAs. Also, as noted for flat-rate 

premiums above, plan incidence and participant removal rates through RTAs reported from 2015-2018

may not remain steady in the future.

Change in PBGC’s Risk Profile

While RTAs represent a loss of future premium income to PBGC’s Single-Employer Program, they also 

reduce the participant population and the benefits that PBGC is responsible for insuring. This raises the 

question of whether, on balance, PBGC’s future net financial position is strengthened or weakened by 

RTA activity.

Two factors to consider are whether a plan performing an RTA is more or less likely to present a claim to 

PBGC after the RTA is completed, and how the RTA affects the PBGC’s exposure (i.e. the plan’s 

unfunded guaranteed benefits). 

To examine whether plans performing RTAs are more or less likely to present claims to PBGC, we 

compared the RTA rate among large plans sponsored by financially weak companies (i.e. the plans 

PBGC classifies as reasonably possible to terminate) to the RTA rate among other large plans (plans for 

which the risk of termination is remote). Plans classified as reasonably possible to terminate are generally 

defined as single-employer plans with at least $50 million in unfunded vested liabilities that are sponsored 

by companies whose credit quality is below investment grade. There were 576 large plans considered 

reasonably possible to terminate during the study period, compared to 2,380 large plans that were not 

considered reasonably possible to terminate.

The RTA rate among large plans sponsored by financially weak companies does not significantly differ 

from the RTA rate among other large plans (47.0% vs 44.2%). Additionally, the proportion of total 

participants removed through RTAs, during the study period, was similar between plans sponsored by 

financially weak companies and other plans. This suggests that, while healthy and troubled plan sponsors

may have different reasons for performing an RTA, participants are being removed from plans of each 

group at the same proportion.

14 Estimated VRP income for the 2019 premium payment year is based on actual premium receipts through August 

2020 and estimated premium receipts based on the prior year’s premium payment pattern.
10

Figure 6 – Plans Sponsored by Financially Weak Companies and All Other Plans Performed RTAs at a 

Similar Rate

As for whether RTAs impact the size of a potential future claim to PBGC, we do not currently have 

enough data to determine trends in claim size following an RTA. 

Data Availability, Limitations, and Adjustments

Information Collected

PBGC first required single-employer pension plans to report their RTAs on the 2015 PBGC 

Comprehensive Premium Filing. This report relies on premium filing data for the 2015 through 2018

premium filing years. The premium filings only requested the number of participants offered lump sums, 

the number of participants who elected a lump sum, the number of not-in-pay status participants for 

whom the plan purchased annuities, and the number of in-pay status participants for whom the plan 

purchased annuities. 

The PBGC premium filing instructions request information regarding RTAs performed during the current 

plan year or, if it was not reported on the prior premium filing, the prior plan year. Plans are instructed to

disregard lump sum windows ending or annuity purchases made less than 60 days before the premium 

filing is made. Premium filings are due the 15th day of the 10th full calendar month of the plan year. 

Example: A plan has a calendar-year plan year and always submits its premium filing on the due date, 

generally October 15th. It reports RTAs performed during the prior plan year or current plan year, 

excluding RTAs reported on prior filings and RTAs performed less than 60 days before the premium filing 

is made. Since 2015 was the first year PBGC requested RTA reporting, the plan reports all RTAs 

performed from January 1, 2014 through August 16, 2015.

15 The 2016 premium filing reports RTAs from 

August 17, 2015 through August 16, 2016, and subsequent premium filings report RTAs during the same 

August-to-August period. 

15 The 2015 filing was the first filing to request RTA information, so it includes a longer reporting period for RTAs 

(approximately 19.5 months) than subsequent filings. Data for 2015 is presented as reported and not annualized 

unless otherwise noted. 

42%

58%

38%

62%

RTA Prevalence by Financial Strength of Large Plan Sponsors

(Inner Circle is Plans Sponsired by Financially

Weak Companies, Outer Circle is All Other Plans) 

Plans with RTAs

Plans without RTAs
11

Accordingly, PBGC collected 55.5 months of RTA data from the 2015 through 2018 premium filings 

(January 1, 2014 through August 16, 2018). The period covered may differ for plans that have a noncalendar-year plan year or file prior to the due date, but the length of the period covered should be 

approximately 53.5 months for all plans that are not new or newly covered, did not terminate or merge 

with another plan, and did not change plan years during the period. 

Participant Count Adjustments

The participant count date for the PBGC premium filing is the last day of the plan year preceding the plan 

year of the filing. As explained above, the RTAs are generally reported over the period beginning 60 days 

before the prior premium due date through 60 days before the current premium due date. Since the 

participant count date is within the RTA reporting period, the exact participant count, as of the date the 

RTA was performed, could not be determined with the data available. This timing mismatch can distort 

results when exploring the RTAs. 

Several options were examined to adjust participant counts to account for the timing mismatch. 

Ultimately, the method we used was to add the number of participants removed through the RTA back 

into the current year’s participant count when participant counts for an RTA exceeded the corresponding 

participant count on the premium filing (this method assumes that the RTA happened prior to the 

premium filing participant count date). This approach was the least distortive method that consistently 

addressed the issue. 

Example: A plan reports 500 participants on its 2017 premium filing, 200 of whom are Terminated Vested 

participants (TVs). It also reports that it offered lump sums to 300 TVs, 150 of whom accepted. Since the 

plan offered lump sums to more TVs (300) than it reported in its participant count (200), it is likely that the 

lump sum offer occurred prior to the participant count date. Therefore, the number of participants who 

accepted a lump sum offer (150) were added back to the TV count and participant count, for a total of 350 

TVs and 650 participants at the time of the lump sum offer. These adjusted totals were used to determine 

plan sizes and offer rates. 

Beginning with the Comprehensive Premium Filing Instructions for 2020 Plan Years, PBGC is requesting 

data for RTAs performed in the prior plan year, rather than up through 60 days before the premium filing 

date. This adjustment will better align the RTA participant counts with the plan participant counts and 

allow for more complete analysis of participant risk transfer rates in the future. 

Data Excluded

On the comprehensive premium filing, plans report if a premium filing will be their final filing due to plan 

termination by distribution of plan assets, PBGC trusteeship, merger/consolidation, or cessation of PBGC 

coverage. These plans were not examined in this study. 

Manual Adjustments

Two minor manual adjustments to the data were made to correct for publicly known discrepancies. These 

discrepancies included a small plan reporting significantly more lump sum offers than participants that 

have ever been in the plan, and a large plan reporting that included its in-pay lump sum offers and 

elections within its not-in-pay lump sum reporting. 

Conclusion

Many factors influence the future incidence of RTAs such as:

• Movement of interest rates, which affect the value of a pension plan’s vested liabilities, the value 

of plan assets, the value of lump sum distributions, and the pricing of insurance company 

annuities,
12

• Changes in PBGC premium rates (both flat rate and variable rate),

• Pension plan funding levels due to financial market performance and changes in interest rates 

used to value plan funding liabilities, and 

• Diminished pools of participants from plans after RTA have been implemented.

Increasing pension plan costs primarily due to the declines in interest rates may influence plan sponsors 

(both those who have performed an RTA in the past and those who have not) to continue looking at ways 

to reduce pension plan risk and reduce pension liabilities.

PBGC will continue to monitor and analyze trends in pension de-risking and risk transfer, including study 

of the effects on future premium income and potential changes in future insurance claims.