Recently, USI Consulting Group helped a client develop and implement a strategic plan to terminate a pension plan which held $113 million in pension liability.
We established a glide path for the plan and alerted the client when it appeared they were close to being able to terminate the plan. Our team estimated that they were fully funded on a plan termination basis according to current rates, but there could be up to a $5 million contribution needed, depending on the final annuity contract pricing.
The estimated contribution was within their budget and they proceeded with the plan termination. The client locked in their asset gains by moving to cash. In addition, rising interest rates removed the possibility of underfunding.
USICG’s team also negotiated $1.1 million in savings on a $27 million annuity contract, resulting in the plan being $8 million overfunded when assets were distributed. We consulted with the client to craft a strategy to use those excess assets to fund a defined contribution plan.*