Impersonation Mode

Insured LDI is a way for ERISA-qualified defined benefit plan sponsors to obtain an asset-liability match from two perspectives. From an economic perspective, the cash flow schedule associated with the Contract will match the projected cash flows of the plan's pension benefit obligation as provided by the plan sponsor. From an accounting perspective, it allows the valuation of the asset, that is, the Insured LDI Contract Value, and the related pension benefit obligation to move together in response to changes in discount rates. This mitigates unexpected shifts in funded status, thereby reducing balance sheet and income statement volatility for the plan sponsor.

Key features of Insured LDI:

  • Guaranteed separate account group annuity contract.
  • Plan sponsor provides Pacific Life with a schedule of cash flows consistent with its projected future plan benefit obligations.
  • Contract Value is determined monthly and is equal to the aggregate present value of remaining scheduled cash flows, discounted using a publicly available interest rate series, that is the Citigroup Pension Discount Curve (Discount Curve).
  • Pacific Life guarantees the Contract Value regardless of the performance of the separate account assets and manages the separate account assets to pay the scheduled cash flows to the pension plan.
  • All transactions related to the Contract are at Contract Value.
  • Subject to the terms of the Contract, the Contractholder may redeem all, or a portion, of the Contract Value beyond the scheduled cash flows for cash or Pacific Life annuities.
  • Subject to the terms of the Contract, the Contractholder may change the scheduled cash flows stated in the Contract.
  • Pacific Life will charge a quarterly fee assessed on average Contract Value to cover investment management, administrative, and guarantee expenses. The fee will be billed and paid separately by the Contractholder and will not be deducted from the Contract Value. There are no additional fees or surrender charges under the Contract.