Administration

Verizon Pension Buyout Benefits Business, Retirees

By Rebecca Moore editors@plansponsor.com | October 19, 2012
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October 19, 2012 (PLANSPONSOR.com) – The low interest rate environment made it the right time for Verizon to transfer some pension risk, a company spokesman told PLANSPONSOR.

“The reason we decided to do the pension transfer is because it will increase our long-term financial strength and allow us to better focus on our core business of building and managing communications networks,” he said. “At the same time it ensures that these pension obligations remain in safe and trusted hands.”  

Peggy McDonald, senior vice president and actuary at Prudential Retirementthe company which signed an agreement with Verizon Communications Inc. to transfer approximately $7.5 billion of the Verizon Management Pension Plan obligations to Prudential (see “Verizon Signs Partial Pension Buyout Deal”)said that is the common desire of the plan sponsors it is working with, “to focus more attention on their core business and less on the business of managing pension risk, while keeping their promise to provide retirement security to plan participants.”  

McDonald told PLANSPONSOR that Prudential has more pension risk transfers in the pipeline “from a wide variety of plan sponsorsfrom small to jumbo in terms of size, from many different industries and from both active and frozen plans.”