International Paper Continues Its Pension De-risking

In early October, 2017 International Paper continued its pension de-risking, transferring approximately $1.3 Billion in pension liabilities to Prudential Insurance Company of America through the purchase of a group annuity contract.  This purchase impacted 45,000 retirees and beneficiaries.  This followed on the heels of an offering of a lump sum buyout in 2016 to 47,000 former employees who had yet to retire.  The Consumer Finance Protection Board has published a guide to help those considering accepting a lump-sum payout.

Article by Edward Stone in The Journal of Legal Nurse Consulting

Attorney Edward S. Stone helps explain some of the difficulties surrounding the NFL Concussion Settlement in this article “The NFL Concussion Settlement, Traumatic Brain Injury, and CTE: Fact, Fiction, and Spin Doctoring”.  The Journal of Legal Nurse Consulting Vol. 28, Issue 3, Fall 2017, pp. 8-11.  Meanwhile, medical researchers continue to explore new ways to ascertain brain damage, including the possibility of using blood tests to detect concussions.  More on this can be found in this article in The Guardian – “NFL concussion: researchers hope blood tests can better detect head trauma.”

New York Times transfers $225 million in pension liabilities

On October 24, 2017 Pension & Investments reported that the New York Times Co. would purchase group annuity contracts from Massachusetts Mutual life Insurance Company to divest itself of $225 Million in pension liabilities under two of its defined benefits plans. This transfer reportedly affects 3,800 retirees and/or their beneficiaries. MassMutual is scheduled to take over the payments to retirees on January 1, 2018.

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Broward Attorney Jose Camacho Sentenced

On August 3, 2017, the Miami Herald reported that Jose Camacho, the Broward County attorney who specialized in filing structured settlement transfer petitions was sentenced to one year in jail, and ten years of probation.  He plead guilty to 14 felony charges after forging over 100 judicial signatures beginning in 2012.

Pension De-Risking State Legislative Update

With interest rates low and the corporate desire to reduce liabilities high, pension de-risking transfers continue at a rapid pace.  While Verizon was one of the first, since 2012 many companies including GM, J.C. Penney, United Technologies, PPG Industries and Lincoln Electric have de-risked by transferring their pension liabilities to an insurance company.  These pension de-risking transfers have impacted hundreds of thousands of retirees nationwide.

Since retirees in de-risking transactions lose all of the uniform protections intended by Congress under ERISA, including the PBGC back-stop, the enactment of legislation at the state level to replace what was lost is essential.

In 2015, Connecticut became the first state to pass legislation protecting retirees in pension de-risking transfers by restoring creditor protections to retirees whose pensions were replaced by group annuities issued by insurance companies. In 2016, legislation that would have provided additional critical protections stalled despite an insurance committee vote of 17-2 in favor of this legislation. In January of 2017, ProtectSeniors.org headed back to the drawing board and worked with Senator Carlo Leone to introduce a new bill.  Senator Leone introduced Proposed Bill 493 and a public hearing was held on February 16th. The Joint Committee on Insurance and Real Estate voted 16-5 in favor of Proposed Bill 493.  On March 10, 2017 the bill was filed with the Legislative Commissioner’s Office – the next stop will be the Senate floor.

In New York, legislation introduced in 2015/2016 stalled in New York’s politically charged insurance committee. Dedicated members of ProtectSeniors.org are working to move things along in New York.

In Massachusetts, House Bill 476, introduced by Representative James Arciero would provide creditor protections, limitations of subsequent transfers, and financial disclosures to retirees impacted by pension de-risking transfers. The bill has been referred to the Joint Committee on Financial Services.  

And finally, in Pennsylvania, House Bill 324 providing creditor protections to retirees was introduced by Representative Warren Kampf.  This bill was referred to the Judiciary Committee on February 3, 2017.

A version of this post appeared in the ProtectSeniors.org recent newsletter.

Favorable Vote for Connecticut Pension De-Risking Bill

In January of 2017, ProtectSeniors.org  worked with Senator Carlo Leone to introduce a new bill providing expanded protections for retirees affected by pension de-risking transfers.  In January, 2017 Senator Leone introduced Proposed Bill 493 and a public hearing was held on February 16th. The Joint Committee on Insurance and Real Estate voted 16-5 in favor of Proposed Bill 493 and on March 10, 2017 the bill was filed with the Legislative Commissioner’s Office – the next stop will be the Senate floor.

Public Hearing on Connecticut De-Risking Bill

Edward Stone, as special counsel to ProtectSeniors.org provided testimony at a Public Hearing in Hartford, Connecticut on February 16, 2017 in support of Proposed Bill No. 493 “AN ACT CONCERNING THE PURCHASE OF AN ANNUITY TO FUND PENSION AND RETIREMENT BENEFITS”.  Jack Cohen, Chairman of the Association of Bell-Tel Retirees, Inc. and Bill Jones, Co-founder and Chairman of ProtectSeniors.org also submitted written testimony in support of Senate Bill No. 493.  This bill, sponsored by Senator Carlo Leone (D-27) will provide additional protects to retirees by requiring reasonable restrictions on subsequent transfers and annual financial disclosures to retirees. Senator Leone also submitted a written statement in support of Senate Bill 493. In 2015 ground breaking legislation was passed in Connecticut providing protections to retirees in pension de-risking transfers when the Connecticut legislature unanimously passed H.B. 6772 providing creditor protections to retirees in pension de-risking transfers.  On July 2, 2015 Governor Dannel P. Malloy (D) signed Public Act 15-167 into law  restoring creditor protections to Connecticut retirees impacted by  pension de-risking transfers. Without this legislation, creditors were able to garnish annuity payments designed for retirement.

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Edward Stone Speaking at SSP Annual Meeting

Edward Stone will be a guest speaker at the Society of Settlement Planners Annual Conference in Las Vegas on March 2, 2017.  Edward Stone and John Darer will participate in a panel discussion on current developments in the structured settlement secondary market.

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New Proposed Pension De-Risking Bill in Connecticut

Connecticut State Senator Carlo Leone (D – 27) has introduced Proposed Bill No. 493 “AN ACT CONCERNING THE PURCHASE OF AN ANNUITY TO FUND PENSION AND RETIREMENT BENEFITS”. This proposed bill requires an insurance company to provide certain annual disclosures to employees and retirees impacted by pension de-risking transfers involving the purchase of a group annuity contract to fund retirement benefits and would limit subsequent transfers of those annuity contracts. Edward Stone Law will be working with ProtectSeniors.org to educate legislators and retirees about the benefits of this important legislation. For more information please visit our website at www.edwardstonelaw.com or call (203) 504-8425.

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CFPB Files Suit Against Access Funding

The Consumer Financial Protection Bureau (CFPB) has filed suit in federal court in Baltimore accusing Access Funding of violations of the federal Consumer Protection Act.  Access Funding (now Reliance Funding) is a purchaser of structured settlement payment streams whose alleged predatory business practices involving people who had been poisoned by lead paint as children were exposed by investigative reporter Terrence McCoy of The Washington Post last summer.  Rep. Louise M. Slaughter (D-NY); Rep. Elijah E. Cummings (D-Md); Sen. Ben Cardin (D-Md); Sen. Barbara A. Mikulski (D-Md) and Sen. Edward J. Markey (D-Mass) all praised the CFPB effort to protect consumers who may have been victims of financial fraud by companies in the structured settlement industry.

This federal lawsuit follows on the heels of a similar lawsuit filed by Maryland Attorney General Brian Frosh in May, 2016.  The state court action filed by Attorney General Frosh is pending in Baltimore City Circuit Court. Frosh has pledged to work to “prevent vulnerable Marylanders from having their money taken from them through illegal practices.”