More than 130,000 Verizon and AT&T retirees welcome federal pension asset protection legislation – InsuranceNewsNet

WE Representing Frank J. Mrvan (Din)

WE Senator Chris Murphy (D-CT)

Look for Stop predatory investors the relocation of retiree assets

COLD SPRING HARBOR, NEW YORK, UNITED STATES, August 9, 2022 / — Since 2012, nearly $220 billion moved from federally protected defined benefit pension plans to less secure group annuities. This process, known as retirement risk transfer (PRT) or retirement risk reduction, allows companies to offload their responsibilities to retired employees who have acquired the right to a pension.

In 2021 alone, more than $40 billion was shifted to annuity providers, with PRT transactions happening at a blistering pace.

For retirees, risk reduction presents many risks and no benefits, as group insurance annuities are much less regulated and less secure for retirees.

For these reasons, Verizon and AT&T pensioners voted in favor of the federal government Pension Risk Transfer Accountability Act 2021 / HR5877 introduced by WE Representing Frank J. Mrvan (Entrance D) and WE Senator Chris Murphy (D-CT). The bill, based on the RISE Act, is also known as the “PRT Accountability Act”.

The LES Accountability Act would direct the WE Secretary of Labor to review and improve the fiduciary standards required to select the most secure annuity provider available, consistent with the protection objectives of the Employee Retirement Income Security Act (ERISA).

The non-profit association BellTel Pensioners Association believes the legislation is a step in the right direction for the protection of retiree earned benefits.

In 2012, 41,000 Verizon retirees saw their pension transferred to a group annuity. These insurance annuities offer less protection than traditional pensions. The wave of risk-reducing transfers has only grown since then, concerning retirees about the transparency and stability of the entities overseeing their pension payouts.

Given that so many insurance companies, and their assets, are being taken over by private investors and hedge funds – some of which use offshore affiliate holding companies – the PRT Liability Act is poised to provide guidance essential for companies looking to select the safest annuity provider available.

President of BellTel Thomas Steed said: “Over the past decade, almost $220 billion in the pension assets of retirees were simply uprooted and transferred – without permission from the beneficiaries – to third parties Wall Street investors, many of whom operate in an opaque world that conceals their true assets, liabilities, risk portfolio and management fees. How can American retirees reasonably trust companies that use offshore entities and shell companies to evade transparency and accountability? »

Among the recent transactions of 2021, Hewlett-Packard shipped $5.2 billion in retiree pension assets at Prudential, and Lockheed Martin sent $4.9 billion to Athena. Additionally, Fortitude Re purchased $31 billion in annuity assets. The reinsurer is co-owned by The Carlyle Group (71.5% ownership) and T&D Holdings (25 percent).

Mr Steed added: “Millions of my fellow retirees remember the very risky investment vehicles that brought down Lehman Brothers, AIG, Bear Stearns – empires just over a decade ago. Since federal pension protection guidelines have not been updated since 1995, Congressman Mrvan and Senators Murphy’s introduction of HR 5877 is not only welcome, but long overdue. We hope its rapid adoption will result in absolute guarantees that our retirement assets cannot be handed over to rogue investors willing to gamble with the assets that have been reserved for our golden years. Edward Peterexecutive director of the nonprofit advocacy group Retired for Justicenoted: “Once a pension risk transfer has been undertaken, retirees lose all uniform protections under Congress under ERISA and, as it stands, they are subject to 50 different non-uniform state laws, depending on the state of residence of the retiree at the time of insolvency or impairment of the company issuing insurance. It’s really unfair to retirees across America. Mr. Stone continued: “Given that retirees lose so much in terms of ERISA protections after the PRT, it is extremely important that pension plan sponsors undertake really rigorous and thorough assessments of the ability to pay claims as well as security of any insurer be considered for a PRT in a manner that is consistent with the fiduciary requirements of ERISA.

BellTel Pensioners’ Association is a non-profit organization that represents more than 130,000 retired members and current employees of the companies and subsidiaries that succeeded the original Bell system. Its membership is made up of union and executive retirees from Verizon and AT&Tdistributed throughout the country.

Christian Agredo BellTel Pensioners Association
+1 646-213-0286
write to us here

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