Edward Stone’s guest column – reprinted below – appeared in the Sunday, October 4, 2015 edition of Cleveland’s “The Plain Dealer.” “Euclid-based Lincoln Electric Co. has become the latest company to join the pension de-risking bandwagon. By offloading its retirees’ pension obligations through the purchase of a group annuity contract from The Principal Financial Group, as of Nov, 1, […]
Today, J.C. Penney announced that it would continue its pension de-risking efforts by purchasing a group annuity contract from The Prudential Insurance Company of America. While exact numbers of retirees affected and the terms of the agreement have yet to be released, it appears that this pension de-risking transfer is an annuity “lift-out” and the […]
Governor Dannel P. Malloy (D) signed into law Public Act 15-167 on July 2, 2015 providing creditor protections to retirees in pension de-risking transfers. Public Act 15-167 takes effect today. Prior to the enactment of this ground-breaking legislation, annuity payments intended for retirement could be garnished by creditors in Connecticut. Edward Stone Law, on behalf […]
Companies continue to de-risk their pension plans at a rapid pace. J.C. Penney Co., based in Plano, Texas offered 31,000 retirees a lump sum buyout offer which expires today. This offer follows an earlier lump sum buyout offer in 2012 that 25,000 retirees elected to take. While the I.R.S. restricted lump sum buyouts with new regulations […]
Plaintiffs’ have filed a petition for re-hearing with the 5th Circuit in Lee v. Verizon Communs., Inc., 2015 U.S. App. LEXIS 14588 (5th Cir. Tex. Aug. 17, 2015), asking that the court re-visit its decision and preserving their right to appeal. Hopefully the 5th Circuit will realize that the risks associated with kicking retirees to […]
The Wall Street Journal’s CFO Journal reported in “Tax Policies Spur Companies to Offer Pension Buy-outs” that in the wake of the IRS’s recent decision to continue using its current mortality tables and new regulations limiting lump-sum buyouts, Newell Rubbermaid and E.W. Scripps will offer lump-sum buyouts to thousands of former employees, with E.W. Scripps also offering an […]
The most recent company to jump on the pension de-risking bandwagon is Lincoln Electric Company who announced that it was de-risking over $900 million in pension obligations to 1900 retirees by transferring its pension obligations to The Principal Financial Group by purchasing a group annuity contract to cover those pension obligations. While pension de-risking offers […]
In Lee v. Verizon Communs., Inc., 2015 U.S. App. LEXIS 14588 (5th Cir. Tex. Aug. 17, 2015), a case closely watched by defined benefit plan (DBP) sponsors, the insurance industry, and ProtectSeniors.org, a retiree advocacy group, a three judge panel rejected the plaintiffs’ challenges to Verizon’s decision to de-risk its pension obligations by removing over 41,000 retirees from […]
In July 2015, the IRS announced new regulations (Notice 2015-49) limiting a company’s ability to de-risk its pension liabilities by making lump sum distributions to participants in pay status. While lump-sum payments may be a cost effective way of de-risking pension obligations, they may not be the best thing for retirees. Taking away the lump sum option from the defined benefits […]
Governor Dannel P. Malloy (D) signed into law Public Act 15-167 on July 2, 2015 providing creditor protections to retirees in pension de-risking transfers. Prior to the enactment of this ground-breaking legislation, annuity payments intended for retirement could be garnished by creditors in Connecticut. While the bill was pared down from that originally proposed to […]
© Edward S. Stone 2014-2022.
