U.S. insurers are buying corporate pension plans at a record clip as rising interest rates and all-time high stock-market values give companies the perfect excuse to offload them, Reuters reported yesterday. Calculating they can make more money from selling companies an annuity to cover the cost of the pension plans and then invest the proceeds in bonds and other securities, insurers are competing to persuade corporate America to sell them their pension risk. Last week, Prudential Financial Inc., the biggest player in pension transfers, said it had finalized $2.2 billion in pension deals during the fourth quarter, including a $1.8 billion deal with United Technologies Corp. With so much competition, many pension consultants expect 2017 to be a strong year for pension deals. Pension transfers totaling $8.1 billion were finalized in the first nine months of 2016, according to LIMRA, an industry trade group. The number of deals hit 225, the highest in more than 25 years. The biggest driver of the trend in recent years is the growing number of companies that are deciding to end their plans, said Scott McDermott, a managing director at Goldman Sachs Asset Management who advises companies on pension issues.
