More employers turning to insurers to sell off pension plan liabilities

U.S. corporate pension plan buyouts reached $3.2 billion during the third quarter, down from $3.8 billion the quarter before, said a LIMRA Secure Retirement Institute sales survey.

The total for the first three quarters was $8 billion, up from the $1.5 billion seen in the first three quarters of 2014, which the institute said was unusual as buyout activity traditionally spikes in the fourth quarter.

“For the last five years, the number of pension buyout contracts sold in the first three quarters has steadily increased,” said Michael Ericson, research analyst for LIMRA Secure Retirement Institute, in a news release. “We've seen 195 new contracts so far in 2015, compared to 159 contracts in the first nine months of 2014.”

Among the buyouts announced in the third quarter were Cleveland, Ohio-based Lincoln Electric Co. settling about $425 million in outstanding U.S. pension obligations through a group annuity purchase from Principal Financial Group, and Exton, Pennsylvania-based West Pharmaceutical Services Inc. settling about $140 million in U.S. pension obligations through a group annuity purchase from MetLife.

Rob Kozlowski writes for Pensions & Investments, a sister publication of Business Insurance.