PLANSPONSOR - October/November 2020 - 15

STATEMENT OF OWNERSHIP,
MANAGEMENT AND CIRCULATION
The Forecast for PRTs
THE PANDEMIC has somewhat slowed
the pace of annuity sales for pension risk
transfers (PRTs) in the U.S. this year, says
George Palms, president of Legal & General
Retirement America. " We expect it will be
a $25 billion year versus $30 billion last
year, " he says. " But, in light of the effects
of COVID-19 [on businesses], the effect on
pension risk transfers has been minimal. "
Mark Paracer, assistant research
director for the LIMRA Secure Retirement
Institute (SRI), says the economic problems
that have resulted from the pandemic
have negatively affected PRT sales this
year, both in terms of volume and dollars.
of PRT activity because plan sponsors
were trying to raise liquidity to survive the
crisis of the pandemic, Palms says, but the
market is now experiencing a resurgence.
" The fourth quarter is typically a busy
time as sponsors look to close deals by yearend.
In four of the past five years, the fourth
quarter was the highest quarter for PRT
premiums, with 42% of the total premium
occurring in that quarter, " Paracer says.
" The urgency to close deals is expected to
hold in 2020 as employers look to reduce
their PBGC [Pension Benefit Guaranty
Corporation] premiums and other costs. "
Palms says one of his co-workers
" There is more uncertainty when
transferring pension obligations
for employees who haven't
decided yet when to retire ... "
" Buyout sales as of June 30 totaled $6.7
billion, down 25% compared with the $8.9
billion recorded in the first half of 2019.
The contracts sold fell by 23%, " he says.
Palms' firm has seen a change in types
of transactions. " Early in the year, there was
a high proportion of plan terminations, "
he says. " Plan sponsors immunized their
bond portfolios and are working through
the process of terminating their plan. They
don't want to pause their efforts. "
Now, there are more retiree-only
deals, he adds. " These are simpler because
the amount of money retirees are getting
each month is known. There is more
uncertainty when transferring pension
obligations for employees who haven't
decided yet when to retire and what kind of
annuity they'll take, " he notes. " These are
different components that will impact what
benefits employees will get and the price of
a pension buy-out transaction. "
The second quarter saw a slowdown
believes Q4 2020 will be " insane " in terms
of the number of transactions and " could
be one of strongest fourth quarters on
record, " he says.
Asked what effect the low interest
rate environment has had on the price
of annuity purchases in the U.S. so far
this year, Palms says rates went down in
March and April, but credit spreads went
up; therefore, the total rate in terms of
how companies price pension liabilities
was the same or going down. " Pricing has
remained quite attractive, based on what
I'm hearing from intermediaries, " he says.
Another factor affecting pricing, he
observes, is that the PRT market is still a
healthy, competitive market, with 17 or 18
providers; this enables plan sponsors to
access multiple bidders.
" My advice to a sponsor today is that
a PRT transaction continues to be a very
effective tool to manage risk, " Palms
says. -Rebecca Moore
1. Publication title: PLANSPONSOR
2. Publication number: 013-662
3. Filing date: October 30, 2020
4. Issue frequency: Monthly, with exceptions
5. Number of issues published annually: 6
6. Annual subscription price: $175
7. Office of publication: 1177 Avenue of the Americas,
14th Floor, New York, NY 10036; Contact person: Jackie
Scott, Telephone 203-524-9111.
8. Mailing address of headquarters or general business office
of publisher: 1177 Avenue of the Americas, 14th Floor,
New York, NY 10036
9. Publisher: Alison Cooke Mintzer, 1177 Avenue of the
Americas, 14th Floor, New York, NY 10036; Managing
Editor: Judy Faust Hartnett, 1177 Avenue of the Americas,
14th Floor, New York, NY 10036
10. Owner: Asset International, Inc., 1177 Avenue of the
Americas, 14th Floor, New York, NY 10036;
Genstar Capital, 4 Embarcadero Center, Suite 1900,
San Francisco, CA 94111-4191
11. Known bondholders, mortgagees and other security
holders owning or holding 1 percent or more of total
amount of bonds, mortgages or other securities: None
12. Tax status has not changed during preceding 12 months
13. Publication title: PLANSPONSOR
14. Issue date for circulation data: August/September 2020
15. Extent and nature of circulation: average number copies
each issue; number of copies of single issue
a. Total number of copies (net press run):
24,645; 24,391
b. Paid and/or requested circulation:
1) Paid/requested outside-county mail subscriptions
stated on Form 3541: 4,495; 1,805
2) Paid/requested in-county subscriptions
stated on Form 3541: 0; 0
3) Other non-USPS paid distribution: 200; 200
4) Other classes mailed through the USPS: 0; 0
c. Total paid and/or requested circulation: 4,695; 2,005
d. Nonrequested distribution:
1) Outside-county as stated on Form 3541: 19,609;
22,161
2) In-county as stated on Form 3541: 0; 0
3) Other classes mailed through the USPS: 0; 0
4) Nonrequested copies distributed outside USPS:
200; 200
e. Total nonrequested distribution: 19,809; 22,361
f. Total distribution (sum of 15c and 15e): 24,504;
24,366
g. Copies not distributed: 141; 25
h. Total (sum of 15f and 15g): 24,645; 24;391
I. Percent paid and/or requested circulation: 19.05; 8.2
16. Electronic copy circulation: average number copies each
issue; number of copies of single issue
a. Requested and paid electronic copies: 5,051; 4,131
b. Total requested and paid print copies (Line 15c) +
Requested/paid eelectronic copies: 9,746; 6,136
c. Total requested copy distribution (Line 15f) +
Requested/paid electronic copies: 29,555; 28,497
d. Percent paid and/or requested circulation (both print
and electronic copies): 33.00; 21.50
17. Publication of Statement of Ownership will be printed in
the October/November 2020 issue of this publication.
18. Signature and title of editor, publisher, business manager
or owner: Alison Cooke Mintzer, Publisher, 10/30/2020.
PLANSPONSOR.COM October - November 2020 15
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PLANSPONSOR - October/November 2020

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