Accommodating transactions

The fiduciary decision to select an annuity provider is among the most important decisions a Plan Fiduciary will make.

Plan fiduciaries, as evident from guidelines provided by the Department of Labor, should seek the support of an experienced independent annuity expert and carefully consider to what extent that advisor may acknowledge that their services constitute investment advice under ERISA.

Participants in broker-dealer M&A transactions may be unable, without FINRA assistance, to determine whether a transaction requires approval under Rule 1017.

If Rule 1017 approval is required, uncertainties as to the likely timing for approval may further complicate the transaction.

Thus it is important to conduct annuity pricing analysis and company decision-making prior to soliciting the insurance marketplace.

Being able to demonstrate to insurers that preliminary deal economics and corporate approvals have been considered are important steps to obtain optimal insurer pricing as sponsors move closer to deal execution.

The Penryn Campus is operated jointly by University College Falmouth and the University of Exeter through Falmouth Exeter Plus (FXPlus).

FXPlus provides a range of services to both institutions, including estates and facilities management, commercial activities and accommodation services.

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Some common examples of transactions requiring Rule 1017 approval include: FINRA approval is required as a condition to closing each of the foregoing types of transactions and, in many cases, requires a longer period of time than any other closing condition — thus becoming the “critical path” to completing the deal.

What does this mean for pension sponsors evaluating a potential annuity settlement transaction?

Below are some specific areas worthy of further consideration.[1] Transaction Readiness– the insurance marketplace is focused primarily on supporting transaction-ready plan sponsors.

With an increasing number of sponsors expected to be interested in small retiree benefit lift-out transactions (to reduce PBGC premiums), it is imperative to assess the business case and corporate approval process prior to engaging with insurers.

Fiduciary Governance – plan participants are directly impacted in any annuity transaction.