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Ever since the passage of the Pension Protection Act of 2006, plan sponsors have struggled to keep their defined benefit plans adequately funded in the midst of increasingly volatile capital markets, shorter asset and “interest smoothing” periods, and higher targeted funding levels. Efforts to manage this pension risk have ranged from simply taking a more active approach to managing plan investments through liability-driven investment (LDI) techniques, to pension buy-ins and lump-sum offers to plan participants. One de-risking technique, however, has attracted significant attention as of late: plan buyouts through the purchase of group annuity contracts. The benefit of such an arrangement, however, can be significantly undermined by the company’s failure to carefully consider the legal and governance issues involved. As is the case with many actions in the Employee Retirement Income Security Act-covered plan universe, pension buyouts are an invitation to litigation. The sizes of these deals, both in terms of the dollar amounts and the number of plan participants, make for increased demands on all parties involved—plan sponsors, administrators, consultants, and insurers. All must remain mindful of their obligations under ERISA in order to reduce the possibility that lawsuits by aggrieved annuitants will render the buyout medicine worse than the pension-disease. By engaging in the necessary procedural prudence up front, companies should be able to ward off—or at least successfully defend—resulting litigation or enforcement actions. Plan buyouts have been around for some time, but the sizes of two recent deals have brought this particular type of de-risking transaction to the fore. In June 2012, General Motors Company announced a deal that it had struck with The Prudential Insurance Company of America for the purchase of over $26 billion worth of annuity contracts to satisfy its pension obligations to approximately 42,000 salaried retirees. And in October, Verizon Communications Inc. announced its own buyout deal with Prudential, this one involving the purchase of $7.5 billion in obligations. With no previous pension buyout since the 1980s surpassing the $1 billion mark, many pension experts have cited these two recent deals—with their sheer size and the prominence of the parties—as signaling the beginning of a significant trend toward de-risking through dramatic plan-wide buyouts.