Pension risk transfer shifts safety net to state rather than federal programs

Pension risk transfer, or de-risking, has implications for how pensions are protected and whether the payments are off limits to creditors, reports NASDAQ.com. When an insurer takes over a pension plan through the sale of an annuity, that pension is no longer protected by federal law, but rather state law, which regulates insurance companies. Similarly, protection of pensions by the Pension Benefit Guaranty Corp., is replaced by state guaranty funds in the event of an annuity insurer insolvency.