Keeping Benefits Safe: Pension Risk Transfers
Mar 27, 2026
Keeping Benefits Safe: Pension Risk Transfers
Mar 27, 2026
A recent Capitol Hill discussion hosted by ACLI, the U.S. Chamber and Mercer explored the role pension risk transfer play in the future of work and retirement.
Everything about the way we work has changed. People don’t stay with the same company for decades anymore. In fact, the average tenure is just 3.9 years. Traditional pensions were built for a different era, when many workers spent most of their careers with one employer. Today, jobs change more often, but what hasn’t changed is the desire for guaranteed retirement income — one that lasts for life.
Even in a changing workplace, employers continue to provide retirement benefits through a voluntary system that helps workers build financial security. One way employers are keeping long-term promises is through pension risk transfers.
Pension risk transfers aren’t new. For over a century, employers have moved pension obligations to life insurers by purchasing group annuity contracts. For the last 50 years, federal law provides that an annuity contract is the only way for an employer to transfer pension liabilities and ensure guaranteed lifetime income. Here’s why that is.
First, life insurers specialize in managing long-term risks, especially longevity risk. That expertise is backed by a strong track record. Over the past 30 years, no retiree whose pension was transferred to an annuity has lost benefits.
Second, life insurers are closely supervised by state regulators. Oversight is strong and consistent across all 50 states and D.C., based on standards developed by the National Association of Insurance Commissioners. Regulators require insurers to hold substantial capital, make detailed disclosures, and set aside reserves for every policy so obligations are fully backed by assets.
Bottom line: pension risk transfers safeguard promises made in the past — and help ensure they are honored far into the future as society continues to evolve.
Jim Szostek
Jim Szostek is Vice President & Deputy, Retirement Security at the American Council of Life Insurers (ACLI). He helps guide ACLI policy on legislation and regulations affecting the U.S. retirement system. Prior to joining ACLI in 2008, he held positions at CIGNA and The Hartford.
