An Industry First: New Client Funds Pacific Life’s Unique Pension Risk Transfer Solution

Insured LDI is an entirely new concept, different from traditional buy-out or buy-in solutions— $50 million deposited to Pacific Life

NEWPORT BEACH, Calif.--(BUSINESS WIRE)--Pacific Life received funding on December 28, 2011, for a $50 million pension risk transfer case—a process that took less than six months from client inquiry to plan funding—on the strength of an entirely unique approach to help de-risk pension plans: Insured Liability Driven Investing (Insured LDI).

“Insured LDI helps plan sponsors sleep at night due to its fully transparent valuation and fees under a pay-as-you-go approach in a revocable contract, with no surrender charges.”

As the volatile market environment and regulatory changes continue to play havoc with the funded status of defined benefit pension plans, more plan sponsors are seeking strategies to reduce and/or eliminate pension risks. Such “de-risking“ strategies range from best-efforts investment management approaches that more closely match assets to liabilities, to the use of insurance products that provide guarantees (“pension risk transfer” solutions). For plan sponsors not seeking to immediately terminate their plan and purchase an insurance company terminal funding “buy-out” contract, Pacific Life’s Insured LDI product provides a compelling alternative to best-efforts LDI strategies and “buy-in” pension risk transfer solutions currently available.

"Simply put, boards want to focus on their core business, and there is demand for an insurance product that can stabilize a pension plan's funded ratio and its impact on financial statements in any market environment," says Dave Fanger, field vice president, Institutional Sales, Retirement Solutions Division.

Pacific Life’s Insured LDI is a first-of-its-kind solution for just about any plan, whether active or frozen, funded or underfunded, and covering any group of plan participants, and whether or not the plan sponsor desires to ultimately terminate the plan. The company’s new Insured LDI client was managing an underfunded pension plan that, through this new solution, was able to cover its complete range of plan participants, and not just retirees.

“The product addresses the pension risk transfer concerns we hear from plan sponsors,” says Richard Taube, vice president, Institutional & Structured Products for Pacific Life. “Insured LDI helps plan sponsors sleep at night due to its fully transparent valuation and fees under a pay-as-you-go approach in a revocable contract, with no surrender charges.”

Russ Proctor, director, Institutional Sales, Retirement Solutions Division, says the company is extremely pleased to have helped a plan sponsor achieve a solution so quickly after launching Insured LDI. “With Insured LDI,” Proctor says, “plan sponsors of all types now have a new and very different alternative to consider.”

Marketing materials and additional information regarding Insured LDI are available at www.InsuredLDI.com.

About Pacific Life

Offering insurance since 1868, Pacific Life provides a wide range of life insurance products, annuities, and mutual funds, and offers a variety of investment products and services to individuals, businesses, and pension plans. Pacific Life counts more than half of the 100 largest U.S. companies as its clients. For additional company information, including current financial strength ratings, visit Pacific Life online at www.PacificLife.com.

Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Client count as of May 2011 is compiled by Pacific Life using the 2011 FORTUNE 500® list.

Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each company is solely responsible for the financial obligations accruing under the products it issues. Insurance product guarantees are backed by the financial strength and claims-paying ability of the issuing company.