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.