HP Inc., the Palo Alto, California based technology company will transfer $5.2 Billion in pension liabilities to Prudential Insurance Company of America as of October 31, 2021. HP disclosed this information in its recent 10-Q filing. This represents approximately one-half of HP’s U.S. pension liabilities. The pension de-risking transfer affects some 41,000 retirees and beneficiaries.
Last month, on July 12, 2021, in Consumer Financial Protection Bureau v. Access Funding, LLC, et al, (Case No. 16-3759, U.S. District Court, District of Maryland) Judge Ellen Hollander denied a motion to dismiss the amended complaint and a motion for a judgment on the pleadings. The amended complaint filed in 2017 against Access Funding, LLC, Access Holding, LLC, Lee Jundanian (former CEO of Access Funding), Raffi Boghosian, COO of Access Funding, Michael Borkowski, CEO of Access Funding, and Charles Smith, Esq., an advisor for Access Funding alleged that the defendants employed abusive practices when purchasing structured settlements from consumers in exchange for lump-sum payments. The case was stayed for several years pending the Supreme Court’s decision in Seila Law LLC v. CFPB, __ U.S.__, 140 S. Ct. 2183 (2020). In her July 12th memorandum opinion, Judge Hollander found that while Seila Law was not binding, the facts in that case were similar to the Access Funding case. As such, she denied defendants motion and the CFPB’s enforcement action against Access Funding, Jundanian, Boghosian, Borkowski, and Smith will continue.
This August 2, 2021 Washington Post feature article examines the controversial practice of “race-norming” and its use by the NFL in determining compensation for former players in the NFL Concussion Settlement. The Washington Post’s investigation found that “the NFL and Seeger are responsible for building a settlement claims process that guaranteed race-norming would occur, making it more difficult for some Black former players to qualify for payments, and they failed to act on concerns that the practice was discriminating against Black former players as far back as 2019.” According to the Washington Post, counsel for the NFL, Brad Karp, declined to be interviewed for the article, but in written statements to the Post, “continued to defend the practice of race-norming and disputed claims made by former players, their lawyers, and some members of Congress that the practice is discriminatory.”
Najeh Davenport and Kevin Henry sued the NFL in August 2020, alleging that their “cognitive function” test scores were manipulated using “race-norming” to reduce their chances of receiving benefits under the concussion settlement. Judge Anita Brody dismissed their claims in March 2021 as “an improper collateral attack on the settlement agreement in the NFL multidistrict litigation” but expressed concern over the practice of race-norming and ordered that the NFL and Class Counsel, Seeger Weiss address the issue with Magistrate David Strawbridge. In June 2021, Judge Brody allowed Mr. Davenport and Mr. Henry to participate in the mediation with the NFL and Class Counsel.
Kevin Henry and Najeh Davenport are represented by Cyril V. Smith, Aitan D. Goelman and Ezra B. Marcus of Zuckerman Spaeder LLP, Edward S. Stone of Edward Stone Law PC, and J.R. Wyatt of J.R. Wyatt Law PLLC. The two cases are In re: National Football League Players’ Concussion Injury Litigation, No. 2:12-md-02323 (E.D. Pa.), and Henry et al. v. NFL, No. 2:20-cv-04165 (E.D. Pa).
Lockheed Martin transferred $4.9 billion in pension obligations to two of Bermuda based Athene’s subsidiaries, Athene Annuity and Life Company and Athene Annuity & Life Assurance Company of New York. This is Lockheed’s second pension risk transfer transaction with Athene, and s is Lockheed’s fourth pension de-risking transfer in the last two years. In 2019, $1.9 Billion in pension liabilities was transferred to MetLife; in 2020 Metropolitan Life Tower (a MetLife subsidiary) took on $1.4 Billion of Lockheed’s pension liabilities, and in 2018 $800 Million was transferred to Athene.
This latest pension de-risking transfer affects approximately 18,000 participants of Lockheed Martin’s pension plan who are currently receiving benefits. Beginning on January 1, 2022, Athene will take over the payment and administration of retirement benefits for these 18,000 retirees and their beneficiaries.
Just one day after the NFL announced that it would work to end the use of “race-norming” in the NFL Concussion Settlement, U.S. District Judge Anita Brody (E.D. Pa.) granted the request of two former Pittsburgh Steelers, Kevin Henry and Najeh Davenport to intervene in the mediation between the NFL and class counsel, Chris Seeger. Mr. Davenport and Mr. Henry sued the NFL in August 2020 alleging civil rights violations resulting from the use of “race-norms” in the NFL Concussion Settlement. The suit was dismissed by Judge Brody as “an improper collateral attack on the settlement agreement….”
The controversial practice of “race-norming” assumes that Black players have a lower cognitive function compared to non-Black players, which made it much more difficult for Black players to qualify for an award in through the NFL Concussion Settlement.
Last month, a group of NFL families dropped off more than 50,000 petitions at the Federal Courthouse in Philadelphia where Judge Anita Brody dismissed Mr. Henry’s and Mr. Davenport’s civil rights lawsuit which alleged that both former players would have received settlement awards from the NFL if the settlement administrators had applied the same norms used for non-Black players.
The NFL Concussion Settlement was finalized in 2017. Since that time, more than 2,000 former players have filed claims, but fewer than 600 former players have received awards.
Henry and Davenport are represented by Cyril V. Smith, Aitan D. Goelman and Ezra B. Marcus of Zuckerman Spaeder LLP, Edward S. Stone of Edward Stone Law PC, and J.R. Wyatt of J.R. Wyatt Law PLLC. The two cases are In re: National Football League Players’ Concussion Injury Litigation, No. 2:12-md-02323 (E.D. Pa.), and Henry et al. v. NFL, No. 2:20-cv-04165 (E.D. Pa).
February 2020: Armstrong World Industries transfers $1 Billion for 10,000 retirees to Athene
December 2020: Lockheed Martin transfers $1.4 Billion of pension liabilities for 13,500 retirees to MetLife
December 2020: Phillips North America transfers $1.2 Billion in pension liabilities for 11,000 retirees to MetLife and Principal
December 2020: GE transfers $1.7 Billion of pension liabilities for 70,000 retirees to Athene.
February 2021: Dow transfers $700 Million in pension liabilities for 12,000 retirees to MetLife
April 2021: JCPenney transfers $2.8 Billion in pension liabilities for 30,000 retirees to Athene
Not all companies who offload their pension liabilities to insurance companies disclose the name of the company taking on the pension liabilities. Below is a recap of some 2020 transfers where the company did not disclose the insurance company , as reported by S&P Global Market Intelligence.
Teradyne Inc. – $24.4 Million
Lockheed Martin – $793 Million
Kellogg Co. – $470 million
Newell Brands Inc. – $157 Million
Eastman Chemical Co. – $110 Million
DTE Electric Co. – $60 Million
Arconic Corporation, the aluminum provider based in Pittsburgh transferred $1 Billion in pension liabilities to Massachusetts Mutual Life Insurance Company. This transaction affected approximately 8,400 Arconic retirees or beneficiaries. Prior to the transfer, Arconic made a $250 million contribution to its US pension funds. MassMutual assumes responsibility for making payments to the retirees and beneficiaries in July 2021.
GE transferred $1.7 Billion in pension liabilities to Athene Annuity and Life Company and Athene Annuity & Life Assurance Company of New York in late 2020. This transaction affects approximately 70,000 retirees who have been receiving benefits from GE’s pension plan. Bermuda based Athene Holding has purchased more than $18.5 Billion in pension liabilities affecting over 300,000 retirees since it entered the pension risk transfer business in 2017.
JCPenney, the ailing retailer, declared bankruptcy in May 2020 and sold off its retail operations before emerging from Chapter 11 at the end of 2020. In early April, Athene Holding took over $2.8 Billion of JC Penney’s pension obligations, completing the termination of JCPenney’s pension plan. Two of Athene’s wholly owned subsidiaries, Athene Annuity and Life Company and Athene Annuity & Life Assurance Company of New York will issue a group annuity contract to JCPenney and individual annuity certificates to eligible participants. This transaction affects approximately 30,000 JC Penny retirees and is Athene’s largest pension risk transfer transaction to date.