What's a defined benefit plan?
Find out about the advantages and responsibilities associated with sponsoring a defined benefit pension plan.
We make defined benefit plans work
Defined benefit (DB) plans are a valuable asset for retaining talent and providing for retirement. But they can be a challenge to administer. That's where we come in.
Why John Hancock?
Whether the goal is to derive more value from an active pension plan or to find the best course of action for a frozen one, we have the experience and solutions to help.
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Over 50 years of experience managing DB plans
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Credentialed team of actuaries, averaging 20+ years of industry experience1
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Comprehensive solutions for traditional DB and cash balance plans
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Seamless integration with defined contribution and nonqualified plans
Capabilities that span the spectrum
From plan design to participant communications, our support encompasses every aspect of administering pension plans to help sponsors drive retirement readiness and achieve their other plan objectives.
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Actuarial services and plan design consultation2
- Analysis, modeling, and reporting
- Calculation of minimum required contribution and pension accounting
- Evaluation of plan risk, effectiveness, and, if appropriate, alternative strategies
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Regulatory and fiduciary support
- Plan document drafting and upkeep
- All applicable form filings, notices, and required testing
- Continual review and monitoring of the Internal Revenue Code and regulatory changes
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Funding and investment planning
- Asset liability modeling
- Liability-driven investment consultation and services3
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Plan management and administration
- Complete transactional outsourcing
- Dynamic plan sponsor and participant websites
- Dedicated trustee and custodial services4
A consultative, needs-based approach
Our specialists are actively involved throughout the lifecycle of the DB plan, helping the plan sponsor understand financial ramifications, legislative changes, and other factors that may affect the plan.
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Dedicated DB analyst
- Manages the plan transition
- Helps ensure key objectives are met
- Serves as your day-to-day administrative contact
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Dedicated actuary
- Serves as your resource for all financial and risk-related plan issues
- Participates in plan design discussions
- Partners with the plan's financial professional to develop liability-driven investment strategies
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Strategic relationship manager
- Helps you with plan design and documents
- Coordinates actuarial support
- Arranges employee communications, education, and onboarding
A clearly defined and transparent transition process
We collaborate and communicate with plan sponsors at every stage of the transition, so they always know where they are in the process and what happens next.
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Phase 1
Prepare the transfer
- Manage relationships with prior providers
- Finalize plan provisions and services
- Conduct a thorough data scrub and resolve any issues
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Phase 2
Set up the plan
- Create program calculation engine
- Provide the final trust and service agreement
- Test payroll files
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Phase 3
Transfer assets
- Initiate retiree payments
- Send notice to retirees on transition
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Phase 4
Go live
- Email go-live notice to employees
- Turn on participant website
Related viewpoints
The CARES Act and defined benefit plans: two kinds of relief
Here’s a look at the two specific pension provisions of the CARES Act that may help plan sponsors.
Stay connected
1 John Hancock internal data as of 9/30/21. 2 Actuarial and consulting services are provided directly by John Hancock's Benefits Consulting Group, part of the John Hancock Retirement organization. The sole purpose of this group is to give plan sponsors and financial professionals the opportunity to work with senior-level professionals, with easy availability and at a price that makes sense. 3 These investment services are available from Manulife Investment Management (MIM). Available liability-driven investment (LDI) services include deep plan analysis of potential risk/reward payoffs, consultation on long-term plan management strategies, and access to the wide-ranging investment capabilities of MIM, which has been executing DB LDI strategies since 1983. 4 Trustee and custodial services are provided by John Hancock Trust Company.
Prior to establishing a defined benefit plan, including a cash balance plan, plan sponsors should also consider factors such as, but not limited to, the plan’s funding requirements and their impact on the company’s fiscal position, the investments chosen for the plan and their potential influence on the contributions required, and the federal rules that govern this type of plan. Cash balance plan investment losses may increase contributions and incur higher administration costs because the services of an actuary will be required. Minimum contributions may be required, and the plan will need to pay annual premiums to Pension Benefit Guaranty Corporation to guarantee benefits.