Rising premiums assessed by the Pension Benefit Guaranty Corp., combined with longer life expectancy, are prompting more employers to consider scaling back or even shutting down their defined benefit plans within the next year, according to an Aon Hewitt survey.  

Nearly two-thirds of the employers surveyed said they plan to take some action in 2015. Almost half — 44 percent — said they already have offered terminated employees a lump-sum payout. 

Aon expects that trend to continue, as 47 percent said they expect to offer a lump-sum to terminated participants in 2015. 

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Another 21 percent said they are considering other annuity options for some segment of their pension population.

Nineteen percent plan to inject more cash into their plans, to improve funding levels and, they hope, reduce PBGC premiums. 

Three-quarters of the companies surveyed by Aon Hewitt still sponsor some form of a defined benefit plan, be it fully open, closed to new hires or completely frozen.  

Those figures are bound to change this year, according to the report, which showed 14 percent of open plans are likely to close this year, 9 percent of closed plans are likely to freeze, and 5 percent of all defined benefit plans are likely to terminate in 2015.

Most sponsors have either recently conducted an asset liability study of their plan, or are expecting to do so in the near future, further suggesting the effects of rising premiums and longer-living participants. 

This week, Lockheed Martin Corp. was the latest sponsor to report it had settled a portion of its pension liabilities.  

The Bethesda, Maryland-based defense contractor reported $500 million in projected obligations had been settled through lump-sum payments to terminated employees.  

Last year, Richmond, Virginia-based Brinks Inc. offered a lump-sum buyout to 9,000 terminated employees, joining the list of the ranks to follow Verizon, GM, Ford and Boeing in the effort to reduce future pension liabilities. 

The movement to reduce liabilities, and in turn PBGC premium payments, has no doubt caught the attention of agency. About half of the $8 billion generated in PBGC's single-employer program came from premium collections, according to its fiscal 2014 annual report. 

The agency is calling for more authority to collect information on pension transfers. It says it doesn't have a comprehensive source of information on such transfers, and how they are affecting premiums. 

In January, PBGC sent a proposed rule to the Office of Management and Budget, which, among other things, would require sponsors to notify PBGC when they begin to implement a pension transfer through annuities purchases. 

"Information about risk transfers is critical to PBGC's ability to assess its future financial condition," a summary of the filing posted on the Federal Resister's website said.  

PBGC wants the new rule implemented immediately, affecting sponsors' Form 5500 filings this year. 

OMB will close a comment period on the proposed rule in the coming days. Sponsor and insurance industry advocates like the Chamber of Commerce and the American Council of Life Insurers have weighed in, strongly advocating against the rule, saying PBGC has failed to show how new filing requirements would benefit participants, sponsors, or even the agency itself. 

In its comments against the proposal, Aon said details of annuity purchases and lump-sum payments are not "reportable" events under Section 4043 of the Employee Retirement Income Security Act, which grants PBGC statutory authority to collect information on plans.

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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.