Association of BellTel Retirees Chairman Speaks Out on Pension De-Risking

In a recent interview with PlanSponsor, Jack Cohen, Chairman of the Association of BellTel Retirees, spoke out about the need for protections for retirees in pension de-risking transfers.  “It’s really an unfortunate picture, but we also have to be realistic and keep working hard,” Cohen concludes. “I know that de-risking is a phenomenon whose time has come. But this does not mean we should stop asking questions and stop working to make risk transfers the best we can for retirees. We have to wonder if the insurance companies can stand to take all that risk, and how they will manage it. What we are concerned with is trying to recoup at least some of the protections that we had under ERISA. We are not looking for pie in the sky—we’re looking for Congress and the state legislatures to recognize this could become an economic disaster if we do not protect peoples’ pensions.”

In 2012, 41,000 Verizon retirees were removed from the Verizon pension plan when Verizon purchased a group annuity contract from Prudential to replace the pension benefits for these retirees.  A subsequent legal challenge to the transfer by the Association of BellTel Retirees was ultimately unsuccessful, but the challenge brought much needed attention to the risks facing retirees in pension de-risking transfers.  In late 2015, Connecticut became the first state to pass legislation protecting retirees in pension de-risking transfers. Bills are now pending in New York, Pennsylvania, and Virginia which would replace some of the protections lost to retirees who reside in those states.