Darrach Bourke is a financial professional with over 20 years of experience. He is a financial advisor at Emerson Equity, an investment firm based in San Mateo, California. Darrach Bourke has helped clients create a retirement income plan and adopt favorable pension strategies.

Pension de-risking refers to the process through which a defined benefit pension plan sponsor reduces the risks associated with financing a pension plan. Some of the risks the sponsor seeks to reduce include its ability to fund and operate the plan on behalf of its participants.

With de-risking, the company sponsoring the pension payment pays an insurance company that pays monthly benefits. So rather than receiving their monthly benefit from the employer, the beneficiary receives an annuity from the insurance company.

Numerous techniques can be used to de-risk. De-risking often concerns those enrolled in plans but are no longer receiving pension payments due to retirement or employment separation. Some businesses make lump sum offers to "buy out" these individuals. The lump payment represents the value of the pension benefits they receive.