Terminating a pension plan or implementing a de-risking strategy for a Retiree Carve out or Lump Sum project for your pension plan carries significant legal risk for a Plan Sponsor. BCG has specialized in helping Plan Sponsors with both Settlor and Fiduciary decisions since 1983.  We help Plan Sponsors create and implement a plan that protects all trustees and fiduciaries and clearly illustrate that the participants’ interest were always put first. BCG can be your Independent Fiduciary.

What are Settlor Functions?

Company and/or business related decisions which are not subject to a fiduciary standard of care

What is a Settlor Decision?

Any time you split, amend or terminate your pension plan

  • Lump Sum Offering to Participants of your plan
  • Voting to terminate your pension plan
  • Annuitizing a block of liability

What are Fiduciary Functions?

Subject to higher standard of care because they act on behalf of plan participants

What is a Fiduciary Decision?

Implementing the Settlor Decision

  • Offering Lump Sum to a defined group of participants
  • Selecting an insurance carrier to annuitize a defined group
  • Satisfying Department of Labor’s Interpretative Bulletin 95-1 (DOL 95-1)

BCG will represent the best interest for your participants by providing the following

  1. Create a clear, disciplined decision making progress
  2. Full Due Diligence Review for DOL 95-1
  3. On-Site Tours of all interested carriers.
  4. Clearly illustrate that participants best interest was first in all decisions
  5. Communication Strategy for Participants
  6. Manage conflicts of interest
  7. Certification of Prudence (DALBAR)

6 Factors That a Fiduciary Should Consider in Selecting Annuities 

  1. Quality and diversification of the insurer’s investment portfolio
  2. Size of the insurer relative to the proposed annuity contract
  3. Level of the insurer’s capital and surplus
  4. Lines of business of the insurer and other indications of an insurer’s exposure to liability
  5. Structure of the annuity contract and guarantees supporting the annuities, such as the use of insurance company separate accounts
  6. Availability of additional protection through state guaranty associations and the extent of the guarantees

What is DOL 95-1?

Department of Labor Interpretive Bulletin No. 95-1 states that a plan fiduciary choosing an annuity provider for the purposes of making a benefit distribution must take steps to obtain the safest annuity available, unless under the circumstances, it would be in interests of plan participants and beneficiaries to do otherwise. The plan fiduciary should conduct an objective and thorough analytical review designed to select the ‘safest available’ annuity provider.