Accessibility Statement Skip Navigation
  • Why PRWeb
  • How It Works
  • Who Uses It
  • Pricing
  • Login
  • GDPR
  • Create a Free Account
Return to PRWeb homepage
  • News
  • Resources
  • Contact
When typing in this field, a list of search results will appear and be automatically updated as you type.

Searching for your content...

No results found. Please change your search terms and try again.
  • News in Focus
      • Browse News Releases

      • All News Releases
      • Multimedia Gallery

      • All Multimedia
      • All Photos
      • All Videos
  • Business & Money
      • Auto & Transportation

      • Aerospace, Defense
      • Air Freight
      • Airlines & Aviation
      • Automotive
      • Maritime & Shipbuilding
      • Railroads and Intermodal Transportation
      • Supply Chain/Logistics
      • Transportation, Trucking & Railroad
      • Travel
      • Trucking and Road Transportation
      • View All Auto & Transportation

      • Business Technology

      • Blockchain
      • Broadcast Tech
      • Computer & Electronics
      • Computer Hardware
      • Computer Software
      • Data Analytics
      • Electronic Commerce
      • Electronic Components
      • Electronic Design Automation
      • Financial Technology
      • High Tech Security
      • Internet Technology
      • Nanotechnology
      • Networks
      • Peripherals
      • Semiconductors
      • View All Business Technology

      • Entertain­ment & Media

      • Advertising
      • Art
      • Books
      • Entertainment
      • Film and Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • View All Entertain­ment & Media

      • Financial Services & Investing

      • Accounting News & Issues
      • Acquisitions, Mergers and Takeovers
      • Banking & Financial Services
      • Bankruptcy
      • Bond & Stock Ratings
      • Conference Call Announcements
      • Contracts
      • Cryptocurrency
      • Dividends
      • Earnings
      • Earnings Forecasts & Projections
      • Financing Agreements
      • Insurance
      • Investments Opinions
      • Joint Ventures
      • Mutual Funds
      • Private Placement
      • Real Estate
      • Restructuring & Recapitalization
      • Sales Reports
      • Shareholder Activism
      • Shareholder Meetings
      • Stock Offering
      • Stock Split
      • Venture Capital
      • View All Financial Services & Investing

      • General Business

      • Awards
      • Commercial Real Estate
      • Corporate Expansion
      • Earnings
      • Environmental, Social and Governance (ESG)
      • Human Resource & Workforce Management
      • Licensing
      • New Products & Services
      • Obituaries
      • Outsourcing Businesses
      • Overseas Real Estate (non-US)
      • Personnel Announcements
      • Real Estate Transactions
      • Residential Real Estate
      • Small Business Services
      • Socially Responsible Investing
      • Surveys, Polls and Research
      • Trade Show News
      • View All General Business

  • Science & Tech
      • Consumer Technology

      • Artificial Intelligence
      • Blockchain
      • Cloud Computing/Internet of Things
      • Computer Electronics
      • Computer Hardware
      • Computer Software
      • Consumer Electronics
      • Cryptocurrency
      • Data Analytics
      • Electronic Commerce
      • Electronic Gaming
      • Financial Technology
      • Mobile Entertainment
      • Multimedia & Internet
      • Peripherals
      • Social Media
      • STEM (Science, Tech, Engineering, Math)
      • Supply Chain/Logistics
      • Wireless Communications
      • View All Consumer Technology

      • Energy & Natural Resources

      • Alternative Energies
      • Chemical
      • Electrical Utilities
      • Gas
      • General Manufacturing
      • Mining
      • Mining & Metals
      • Oil & Energy
      • Oil and Gas Discoveries
      • Utilities
      • Water Utilities
      • View All Energy & Natural Resources

      • Environ­ment

      • Conservation & Recycling
      • Environmental Issues
      • Environmental Policy
      • Environmental Products & Services
      • Green Technology
      • Natural Disasters
      • View All Environ­ment

      • Heavy Industry & Manufacturing

      • Aerospace & Defense
      • Agriculture
      • Chemical
      • Construction & Building
      • General Manufacturing
      • HVAC (Heating, Ventilation and Air-Conditioning)
      • Machinery
      • Machine Tools, Metalworking and Metallurgy
      • Mining
      • Mining & Metals
      • Paper, Forest Products & Containers
      • Precious Metals
      • Textiles
      • Tobacco
      • View All Heavy Industry & Manufacturing

      • Telecomm­unications

      • Carriers and Services
      • Mobile Entertainment
      • Networks
      • Peripherals
      • Telecommunications Equipment
      • Telecommunications Industry
      • VoIP (Voice over Internet Protocol)
      • Wireless Communications
      • View All Telecomm­unications

  • Lifestyle & Health
      • Consumer Products & Retail

      • Animals & Pets
      • Beers, Wines and Spirits
      • Beverages
      • Bridal Services
      • Cannabis
      • Cosmetics and Personal Care
      • Fashion
      • Food & Beverages
      • Furniture and Furnishings
      • Home Improvement
      • Household, Consumer & Cosmetics
      • Household Products
      • Jewelry
      • Non-Alcoholic Beverages
      • Office Products
      • Organic Food
      • Product Recalls
      • Restaurants
      • Retail
      • Supermarkets
      • Toys
      • View All Consumer Products & Retail

      • Entertain­ment & Media

      • Advertising
      • Art
      • Books
      • Entertainment
      • Film and Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • View All Entertain­ment & Media

      • Health

      • Biometrics
      • Biotechnology
      • Clinical Trials & Medical Discoveries
      • Dentistry
      • FDA Approval
      • Fitness/Wellness
      • Health Care & Hospitals
      • Health Insurance
      • Infection Control
      • International Medical Approval
      • Medical Equipment
      • Medical Pharmaceuticals
      • Mental Health
      • Pharmaceuticals
      • Supplementary Medicine
      • View All Health

      • Sports

      • General Sports
      • Outdoors, Camping & Hiking
      • Sporting Events
      • Sports Equipment & Accessories
      • View All Sports

      • Travel

      • Amusement Parks and Tourist Attractions
      • Gambling & Casinos
      • Hotels and Resorts
      • Leisure & Tourism
      • Outdoors, Camping & Hiking
      • Passenger Aviation
      • Travel Industry
      • View All Travel

  • Policy & Public Interest
      • Policy & Public Interest

      • Advocacy Group Opinion
      • Animal Welfare
      • Congressional & Presidential Campaigns
      • Corporate Social Responsibility
      • Domestic Policy
      • Economic News, Trends, Analysis
      • Education
      • Environmental
      • European Government
      • FDA Approval
      • Federal and State Legislation
      • Federal Executive Branch & Agency
      • Foreign Policy & International Affairs
      • Homeland Security
      • Labor & Union
      • Legal Issues
      • Natural Disasters
      • Not For Profit
      • Patent Law
      • Public Safety
      • Trade Policy
      • U.S. State Policy
      • View All Policy & Public Interest

  • People & Culture
      • People & Culture

      • Aboriginal, First Nations & Native American
      • African American
      • Asian American
      • Children
      • Diversity, Equity & Inclusion
      • Hispanic
      • Lesbian, Gay & Bisexual
      • Men's Interest
      • People with Disabilities
      • Religion
      • Senior Citizens
      • Veterans
      • Women
      • View All People & Culture

  • Hamburger menu
  • Cision PRWeb provides efficient communication tools to continuously engage with target audiences across multiple online channels
  • Create a Free Account
    • ALL CONTACT INFO
    • Contact Us


      11AM ET Sunday – 8PM ET Friday

  • Send a Release
  • Sign up
  • Log in
  • Resources
  • RSS
  • GDPR
  • News in Focus
    • Browse All News
    • Multimedia Gallery
  • Business & Money
    • Auto & Transportation
    • Business Technology
    • Entertain­ment & Media
    • Financial Services & Investing
    • General Business
  • Science & Tech
    • Consumer Technology
    • Energy & Natural Resources
    • Environ­ment
    • Heavy Industry & Manufacturing
    • Telecomm­unications
  • Lifestyle & Health
    • Consumer Products & Retail
    • Entertain­ment & Media
    • Health
    • Sports
    • Travel
  • Policy & Public Interest
  • People & Culture
    • People & Culture
  • Send a Release
  • Sign up
  • Log in
  • Resources
  • RSS
  • GDPR
  • Send a Release
  • Sign up
  • Log in
  • Resources
  • RSS
  • GDPR
  • Send a Release
  • Sign up
  • Log in
  • Resources
  • RSS
  • GDPR

Lump Sum Payment Option for Current Retirees Adds to Defined Benefit Plan De-Risking Strategy, Says Cowden Associates

Elliot N. Dinkin: As the retirement benefit landscape changes, employers should scrutinize their alternatives and communicate clearly and candidly with affected employees.


News provided by

Cowden Associates

May 20, 2019, 12:10 ET

Share this article

Share toX

Share this article

Share toX

Elliot Dinkin, CEO of Cowden Associates, discusses why employers need to understand and communicate pension options to current retirees.
Elliot Dinkin, CEO of Cowden Associates, discusses why employers need to understand and communicate pension options to current retirees.

PITTSBURGH, May 20, 2019 /PRNewswire-PRWeb/ -- Among the effects of the 2017 Tax Cut and Jobs Act on corporate finance is an increased motivation to address problems with defined benefit employee pension plans. In a recent CFO Research/Prudential Financial study, 64% of senior financial executives said they were very likely to use 2018 tax savings to increase funding of their defined benefit employee pension plans. Virtually the same number (62%) said they were very likely to execute a pension risk transfer to an insurance company once the plan became well-funded.[1]

"This is further indication of the ongoing shift in the U.S. pension benefits landscape," says Elliot Dinkin, President/CEO for Cowden Associates, Inc. and a nationally known expert in actuarial, compensation, and employee benefits issues. "As these changes occur, it is essential that employers and employees clearly understand their options."

“In today’s business environment,” says Dinkin, “it is essential for companies to reduce their financial risk. At the same time, for reasons of morale, loyalty, and company reputation, employers need to communicate the importance of this action to their employees.

Post this

An increasingly common approach to pension plan de-risking is the conversion of an open-ended benefits obligation into a single lump-sum payment.[2] Despite some recent alarmist headlines[3], says Dinkin, a lump sum payment, while not perhaps the most prudent choice for the average retiree, does not represent an evasion of an employer's obligation to pay promised retirement benefits. The formula for calculating these payments is strictly specified by the Internal Revenue Service, and applies to all plan participants. An employer may choose to limit the offering for lump-sums to certain retirees, only through non-subjective criteria. Moreover, under the terms of the Employee Retirement Income Security Act of 1974, an employer cannot force a retiree or former employee to accept a lump-sum payout in lieu of monthly benefits. It is simply offered as an option to eligible plan participants who might be in a position to take advantage of a one-time infusion of capital.[4]

The rise of lump-sum payments, notes Dinkin, comes with (and sometimes as part of) a greater use of pension risk transfer (PRT) arrangements, by which employers reassign their benefit obligations to an insurance company. They are both indicators of a widespread trend in the U.S. business sector to lower corporations' structural financial risk. A company offering a pension must maintain a separate, audited fund designated to be sufficient to meet its future obligations. As neither human mortality nor investment return is predictable, the presence of a pension fund injects an element of chance into corporate financial planning. A desire for risk reduction also helps account for the growing popularity of what are popularly known as 401(k) plans. Rather than place thousands of dollars per worker into a pension fund each year and hope for the best, many employers now opt for a defined-contribution plan, which transfers risk to the employee.[5]

"In today's business environment," says Dinkin, "it is essential for companies to reduce their financial risk. At the same time, for reasons of morale, loyalty, and company reputation, employers need to communicate the importance of this action to their employees. As business advisors, we counsel plan sponsors to explore all the options open to them, and explain those options as clearly and candidly as possible to their employees."

About Cowden Associates, Inc.:
Cowden Associates, Inc., headquartered in Pittsburgh, PA, was created in 2001 by the merger of Halliwell and Associates and MMC&P Spectrum Benefits, which was founded by Jere Cowden in 1986. Currently led by President & CEO Elliot Dinkin, Cowden specializes in helping corporate clients find the best solutions, both for the enterprise and for its employees, with regard to compensation, healthcare benefits, retirement and pension issues, and Taft-Hartley fund consulting. Winning Workplaces and The Wall Street Journal have recognized Cowden as a "Top Small Workplace," a lifetime designation awarded to executives for their ability to build and lead savvy organizations. For more information, visit http://www.cowdenassociates.com

1. Schmidt, Chris, "Tax Law Drives Pension De-Risking Activity," CFO, June 25, 2018.
2. Rojas, Warren, "Pension Buyouts Likely to Be Bolder, if Not Bigger, in 2019," Bloomberg Law, December 17, 2018.
3. DePillis, Lydia, "It just became easier for employers to dump employees' pensions," CNN, March 20, 2019.
4. Bauer, Elizabeth, "What You Need To Know About Pension Lump Sums," Forbes, April 4, 2019.
5. Wathen, Jordan, "Pensions Are Disappearing, Here's How to Save for Retirement," Motley Fool, June 5, 2018.

SOURCE Cowden Associates

Related Links

http://www.cowdenassociates.com

Modal title

Cowden Associates | Company Logo
Cowden Associates | Company Logo
Elliot Dinkin, CEO of Cowden Associates
Elliot Dinkin, CEO of Cowden Associates
Cowden Associates | Company Logo Elliot Dinkin, CEO of Cowden Associates

Contact PRWeb

  • 11AM ET Sunday – 8PM ET Friday
  • Contact Us

About PRWeb

  • About PRWeb
  • Partners
  • Partnership Programs
  • Editorial Guidelines
  • Resources

Why PRWeb

  • Why PRWeb
  • How It Works
  • Who Uses It
  • Pricing

Accounts

  • Create a Free Account
  • Log in
  • Contact Us

Do not sell or share my personal information:

  • Submit via [email protected] 
  • Call Privacy toll-free: 877-297-8921

Contact Cision

Products

About

My Services
  • All News Releases
  • Online Member Center
  • ProfNet
Cision Distribution Helpline
888-776-0942
  • Legal
  • Site Map
  • RSS
  • Cookie Settings
Copyright © 2025 Cision US Inc.