de-risking

Earlier today, a federal district judge rejected an attempt by two Verizon retirees to block the $7.5 billion transfer of pension liabilities to Prudential (Lee v. Verizon, N.D. Tex.).  The court denied plaintiffs’ request for a temporary restraining order or preliminary injunction, finding that the plaintiffs did not establish a substantial likelihood of success on their claims that the transaction would violate ERISA.
Continue Reading Verizon May Proceed with $7.5 Billion Pension Settlement, Court Rules

Last June, GM offered 44,000 retirees the option of converting their on-going pension benefits into a lump sum payment.  Yesterday, GM announced in a filing with the SEC that 30 percent of its retirees accepted the lump-sum offer.  As we previously discussed in this blog, GM’s offer was made in…
Continue Reading What Happens When You Offer Retirees Lump Sums? GM Announces a 30% Take-Rate

Yesterday, Verizon announced that it will transfer $7.5 billion of pension liabilities to Prudential.  As we previously discussed in this blog, many sponsors of defined benefit plans, especially frozen plans, are considering ways to “de-risk” by reducing or eliminating the volatility associated with their pension obligations for financial accounting…
Continue Reading Verizon Announces $7.5 Billion Pension Settlement

Several developments in recent months have made settling pension liabilities look more attractive to sponsors of defined benefit plans seeking to de-risk:  First, Ford and GM announced pension settlements of unprecedented size.  Second, Congress passed a pension funding relief bill, known as “MAP-21,” that could encourage pension settlements.  And, third, the IRS issued three private letter rulings providing useful guidance covering lump sum settlements and annuitizations.
Continue Reading De-risking Through Pension Settlements Becomes More Attractive