On December 18, 2019, Voya Financial, Inc. and Resolution Life Group Holdings Ltd. announced the terms of an agreement where Voya sold substantially all of its in-force life business, including its pension risk transfer liabilities for $1.250 Billion, which included cash of $902 Million, and retained surplus notes of $123 Million. Resolution Life will assume […]
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 […]
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 […]
Boise Cascade, the Boise, Idaho based manufacturer of building materials, has purchased its third group annuity contract from Prudential Insurance Company of America. According to its 8-K filing, $19.8 million in pension assets were transferred to Prudential, representing approximately 10% of Boise Cascade’s projected U.S. qualified pension plan obligations. This is Boise Cascade’s third transaction […]
In late October, Rogers Corp., a global materials manufacturer and one of the oldest public companies in the U.S., announced the termination of its U.S., non-union, pension plan. Rogers transferred $163 Million in pension liabilities in a combination of lump-sum distributions and the purchase of a group annuity contract. In its Q3 earnings call, CFO […]
In October, Owens Corning, the Toledo, Ohio based manufacturer of insulation, roofing, and fiberglass composites announced the transfer of $89 Million in pension liabilities, along with $83 Million in plan assets to an undisclosed insurance company. According to Pension & Investments, the pension risk transfer affects retirees receiving monthly benefits of less than $600 per […]
Massachusetts Mutual Life Insurance Company will take on the pension liabilities from AK Steel Holding Corp. for 4,250 retirees on March 1, 2020. This pension risk transfer allows West Chester, Ohio based AK Steel to transfer $615 Million in pension liabilities and marks its second pension de-risking transaction with Massachusetts Mutual. In 2018, AK Steel […]
In late October, Lennox International Inc., the Richardson, Texas based HVAC manufacturer announced that it was transferring $75 Million in pension liabilities to Pacific Life Insurance Company. In a Q3 earnings call, Lennox CFO Joseph W. Reitmeier stated that: “Similar to what we did in the second quarter, this pension settlement charge relates to an […]
Chicago based Baxter International has purchased a group annuity contract from Prudential Insurance. With this move, Baxter transferred its pension liabilities of approximately $2.4Billion, covering 17,200 former employees to Prudential. This pension de-risking transaction only affects former employees who have reached “pay status.” The transaction was expected to close on October 11, 2019.
According to a recent 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 reports that the first half of 2019 saw over 160 new pension risk transfer deals, totaling over $10 billion […]
