The Pension Benefit Guaranty Corp. disclosed Monday that employers will be required to report to the agency offers they make to plan participants to convert their monthly annuity to a cash lump-sum benefit or shift the obligation to provide the benefits through the employer's purchase of group annuities from insurers.

Such risk transfers have become one of the hottest trends in the defined benefit plan arena. Last year alone, dozens of employers, including Archer Daniels Midland Co. and Newell Rubbermaid Inc., offered certain plan participants the option to convert their annuities to cash lump sums, while several big employers, including Bristol Myers Squibb Co. and Motorola Solutions Inc., shifted billions of dollars of pension plan benefits promised to retirees to Prudential Insurance Co. through the purchase of group annuities from the insurer.

In a filing published in Monday's Federal Register, the agency said it intends to revise 2015 PBGC premium filing procedures to require reporting of such offers and transactions after they have occurred.

A key appeal of these de-risking approaches is that when pension plan participants take lump-sum benefits and are no longer covered by a plan or when pension benefit obligations are shifted to insurers, pension plan sponsors do not have to worry about how interest rate fluctuations and investment results could affect how much they will have to contribute to their plans to fund future annuity payments.

In addition, through reducing the size of their pension plans, employers can reduce certain fixed costs, such as the payment of sharply rising PBGC premiums.

For the PBGC, the approach means its exposure to future losses is reduced since the pension plans it insures will have fewer participants. On the other hand, with fewer participants, employers will pay less in premiums to the PBGC, which the agency uses to help pay promised benefits to participants in failed plans the PBGC takes over.

“Because PBGC premiums and the investment income earned on them are a major source of income for the PBGC, information about risk transfers is critical to PBGC's ability to assess its future financial condition,” the PBGC said in a notice published in the Federal Register.

“There is currently no available comprehensive, detailed and reliable source for information on risk transfers,” the agency added.