The Kemper Corporation, an insurance holding company based in Chicago, Illinois has transferred $205 million in pension liabilities to Banner Life Insurance Company. Kemper closed its pension plan to new hires on January 1, 2006, and benefit accruals have been frozen since June 30, 2016. Before entering into the pension de-risking transfer with Banner Life, […]
On February 1, 2021 American International Group, Inc. agreed to pay a $12 Million fine to the State of New York to settle charges by the New York State Department of Financial Services (NYDFS) that it conducted life insurance business in New York without a license. Between 2014 and 2019, AIG entered into four pension […]
Pension risk transfer facts for 2019 First Quarter 2019: 78 “Buy-out” group annuity contracts purchased by Plan Sponsors “Buy-out” purchases surpassed $4.7 Billion Second Quarter 2019: 112 “Buy-out” group annuity contracts purchased by Plan Sponsors “Buy-out” purchases were $4.166 Billion “Buy-in” purchases were $880 Million. This represented the 5th consecutive quarter with the sale of […]
What is the difference between a pension risk transfer via an annuity “buy-in” or “buy-out?” With an annuity “buy-in” a plan sponsor purchases one or more group annuity contracts to cover pension obligations with the plan sponsor remaining responsible for making payment to the plan participants. With an annuity “buy-out” the defined benefit plan sponsor […]
According to a press release from LIMRA Secure Retirement Institute, eight out of ten defined benefit plan sponsors are “at least somewhat interested” in pension de-risking via the purchase of a group annuity contract. LIMRA (formerly the Life Insurance Market Research Association) reports that “favorable economic conditions and growing awareness and interest in de-risking pension liabilities […]
Senior financial reporter for the NBC News Investigative Unit, Gretchen Morgenson delved into the issue of pension de-risking in an exposé published on June 14, 2020. Morgenson interviewed Karen Friedman of the Pension Rights Center, Thomas Gober, a certified fraud examiner who has worked as a consultant to the U.S. Department of Justice, and Joseph Belth, professor […]
Athene Holding Ltd. paid a $45 Million fine to the State of New York for violations related to its pension de-risking business operated by its subsidiary Athene Annuity & Life Corporation. The New York State Department of Financial Services (DFS) discovered that Athene both solicited and did insurance business in New York without a license. According […]
Public Act 15-167 providing creditor protections to Retirees in pension de-risking transfers took effect on October 1, 2015. Prior to the enactment of this ground-breaking legislation, annuity payments intended for retirement could be garnished by creditors in Connecticut. The legislation was sponsored by Rep. Robert Megna (D-97), Chair of the Connecticut State Insurance Real Estate […]
In 2012 General Motors (GM) embarked on a mission to offload $26 Billion in pension liabilities through lump-sum buyouts and the purchase of a group annuity contact from Prudential Insurance Co. of America. In November 2012 Prudential and GM closed on the largest pension de-risking transfer worldwide. This pension de-risking transfer involved the exchange of […]
Verizon Communications Inc. agreed to purchase a group annuity contract from Prudential Insurance Co. of America to transfer $7.5 billion in pension obligations, according to its SEC filings. This transfer was considered a “lift-out” because Verizon did not terminate its pension plan. This pension de-risking transaction covered approximately 41,000 retired salaried employees who began receiving […]
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