Employers that sponsor defined benefit (DB) plans in recent years have faced fluid economic and financial realities. Those realities might have them looking for ways to reduce their financial risks, improve their bottom lines and focus more on managing their business. One increasingly popular solution is pension risk transfer (PRT). A PRT allows an employer to transfer all or a portion of its DB pension liability to a third party.

Due to the complexities associated with a PRT, it is paramount that employers select an insurance partner with a proven track record and the same level of commitment to fulfilling the obligations and promises made to plan participants.

Why employers consider a PRT

The decision to implement a PRT often comes down to dollars and cents. PRTs are a strategy to get significant long-term financial liability off a plan sponsor’s books. The strategy could save the plan sponsor a significant amount of money over time by reducing or totally removing:

  • Administrative costs that are relatively higher than those of a defined contribution (DC) plan
  • Actuarial costs incurred due to the high level of expertise required to manage DB plans
  • Recordkeeping costs that might last for the duration of each retiree’s life
  • Compliance costs associated with interpreting, implementing and keeping up to date with legislation as well as IRS and Department of Labor regulations, which requires significant, often expensive legal expertise
  • Funding requirements tied to dynamic interest rates and life expectancy, which have been causing upward pressure on minimum contributions for years
  • Pension Benefit Guaranty Corporation (PBGC) premiums that have a current variable rate which is more than 5 times the rate in 2007, and a flat rate that is 3 times the rate in 20071

36%
increase in PRT deals in 2023 compared with 20222

Why Nationwide® for your PRT business

$45.3 billion
of pension liabilities transferred in 2023 from defined benefit plans of private employers to insurance providers2

The PRT market has seen significant growth. Increasing costs and longer tails of liabilities on their books have led employers to seek a cost-effective solution. Market volatility, shifting interest rates and increases in PBGC premiums make PRT an attractive option for many plan sponsors.

We have a proven track record with risk management and strong financial services products. Our diversified corporate portfolio allows us to navigate all manner of economic ups and downs to fulfill our financial obligations and keep every promise we make, now and in the future.

Our PRT personalized service model provides transition simplicity through a team of experts who lead each client through the process from end to end.

Our financial strength and trustworthy brand are strong complements to the evolving needs of the PRT marketplace.

We’re a mutual company focused on the best interests of our customers and partners to achieve long-term results.

Total sales/DWP:
$60.3 billion

Net operating income:
$1.3 billion

FORTUNE
100 Best
Companies to Work For®

A+3
Standard & Poor’s
affirmed 04/30/24
Fifth highest of 21 ratings

A+3
AM Best
affirmed 12/07/23
Second highest of 16 ratings

A13
Moody’s
affirmed 11/10/23
Fifth highest of 21 ratings

Nationwide® associates are committed to extraordinary care

The Nationwide PRT team has deep experience in pension risk transfers and defined benefit plan administration, and our On Your Side® culture means you can depend on us to go above and beyond for your clients — from the initial stages of the PRT process through ongoing relationship management, participant servicing and operational excellence.

For plan participants, we ensure a seamless change to Nationwide with a dedicated transition team and offer ongoing personalized service with:

  • The support of highly skilled agents whom participants can easily reach by phone
  • Robust online and mobile self-service options
  • Free and unlimited benefits estimates, both online and by phone
  • Safe and secure contact center authentication and account protection
Want more?
To learn more about pension risk transfers from Nationwide, visit our webpage.

[1] “Premium Rates: Current and Historical Information,” Pension Benefit Guaranty Corporation (January 2024).
[2] LIMRA U.S. Group Annuity Risk Transfer Sales Survey (Q4 2023).
[3] Ratings apply to Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company.

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