DIETRICH provided a New York based non-profit senior living facility with a liability analysis to better evaluate the plan sponsor’s eligibility for a pension risk transfer. Upon further investigation, it was evident that the plan was not well enough funded to execute a PRT at the time. DIETRICH strategically monitored the plan until it was within a fully funded range to terminate. The plan sponsor’s existing service provider was not able to meet the PRT timeline goals the sponsor required. DIETRICH collaborated with alternative service providers who were able to not only meet timeline goals but performed a PRT in half of the projected time. This strategic timing also resulted in a funding surplus. DIETRICH’s expertise and key industry knowledge in monitoring, consulting, and executing a creative solution enabled the plan sponsor to implement a successful, no-cost Pension Risk Transfer.
A Florida based non-profit hospital was referred to DIETRICH by their plan actuary as the pension plan became fully funded with the goal of reducing pension risk. DIETRICH performed a pension health assessment to determine which group of liability to settle to maximize savings; a retiree liability lift out. DIETRICH provided a strategic timeline for the plan sponsor to maximize carrier participation for highly competitive annuity quotes. These tactics resulted in a 7% savings, equating to roughly 14 million dollars which in turn, created a funding surplus. This resulted in the client securing a top credit rated insurance company providing annuities for the retiree liability at less than book value. DIETRICH’s industry experience, expertise and long-established relationships were vital in providing excellent results.
A New England based private college engaged DIETRICH to consult with the pension plan fiduciaries over a period of several years for services which included monitoring of the cost to transfer the pension plan obligations by providing multiple annuity pricing indications for pension committee meetings, performing town hall meetings with professors and staff and managing the pension annuity placement and annuity bid process end to end. During the preliminary and final bid processes insurance company annuity quotes varied by more than 10%. Dietrich negotiated an additional 4% reduction off the lowest bid saving the plan an additional $800,000 in cost.
A Mid West based Hospital needed to quickly eliminate pension and related costs for budgetary reasons. Current advisors indicated that the process would take more than a year to complete. DIETRICH managed the entire lump sum election fulfillment and annuity placement process within a shortened time frame eliminating $400,000 in ongoing plan expenses. In addition, DIETRICH negotiated an additional 3% savings in the annuity cost saving the hospital an additional $600,000.
A Philadelphia based wholesale florist with an extremely underfunded pension plan was paying high variable PBGC premiums and was required to fund their pension shortfall over 7 years which was causing a severe cash flow drain, ultimately jeopardizing the enterprise’s ability to remain in business. DIETRICH provided advice to the employer and their lender on how the company could borrow the funds against unencumbered employer real estate assets to fund up and terminate the pension plan while reducing the annual cash flow expense to the employer by 50 % and providing a predictable fixed amortization expense allowing the company to remain financially viable to this day.
A Southeast based subsidiary of a large publicly held government contractor had a pension plan still in effect long after the government contract had been completed but was continuing to incur substantial ongoing pension risk and expenses that, due to government regulations, were difficult to end. Over a period of 7 years DIETRICH consulted with both entities which ultimately resulted in the plan being terminated eliminating all pension risk and expense to the contractor prospectively.
A New England based Insurance Company was interested in finding a way to reduce the high accounting expense under FASB and cap their continually growing cost of their retiree medical plan. Using a VEBA, a fully insured health insurance policy and a specially designed group annuity contact to fund the employer subsidy, Dietrich’s solution eliminated the FASB accounting charge and capped the employer subsidy expense while providing the employer with an immediate tax deduction for the annuity cost for more than 1000 retirees. The plan, implemented more than 10 years ago continues in existence today and is administered by Dietrich’s group benefits administrative support unit.
A national publicly traded automotive parts manufacturer had been reducing their employee count from 20,000 to a current level of 2,000 due to downsizing over a 10 year period of time, however, continued to be financially obligated for the pension benefits of all former participants of the pension plan. The pension became oversized relative to the new, downsized enterprise causing significant volatility to their balance sheet and to earnings. DIETRICH proposed a de-risking strategy where the plan’s terminated vested and retiree benefit obligation was systemically reduced over a period of years while minimizing the impact to the employer’s financial statements and reducing the overall volatility and risk to the company.
A New England based shoe manufacturer, struggling financially, needed to offload their pension obligation to survive. Utilizing their current actuarial firm to obtain annuity pricing did not produce the desired results, which continued to expose the company to continuing significant pension expense and jeopardized the company’s future. DIETRICH was engaged and negotiated an annuity price from an insurance company at $2 million less than all other quotes previously provided, allowing the company to successfully terminate the pension plan while preserving all benefits to the participants.
In 2010, a major health systems company located in Florida was interested in terminating their underfunded frozen pension plan. At the time, they were unable to fully fund the plan benefits requiring continuous and significant plan contributions. DIETRICH worked alongside the plan’s actuarial experts to evaluate regularly monitored annuity purchase costs, searching for opportunistic annuity pricing from DOL 95-1 qualified insurers. In addition to core services provided, the team at DIETRICH also assisted with critical items such as missing participant searches, participant communications and Board presentations. In 2019, DIETRICH conducted a successful reverse auction competitive bid process that reduced the sponsors annuity cost by 10%, allowing the sponsor the opportunity to fully fund and terminate the plan. DIETRICH saved the plan sponsor $ 3.2 million dollars through their competitive bid process when performing the pension plan termination.
