Athene Holdings (Athene) has closed a significant pension risk transfer transaction in connection with department store JCPenney’s pension plan termination.
Under the terms of the transaction JCPenney transferred $2.8 billion in pension obligations to Athene.
Athene’s wholly-owned subsidiaries, Athene Annuity and Life Company, and Athene Annuity & Life Assurance Company of New York, have agreed to provide annuity benefits for approximately 30,000 participants of JCPenney’s pension plan who are currently receiving benefits, or will receive benefits in the future.
Sean Brennan, EVP of Pension Risk Transfer and Flow Reinsurance at Athene commented: “We are pleased to serve as a trusted partner to JCPenney in providing retirement security to its retirees and their beneficiaries. By choosing Athene, JCPenney is entrusting its pension promises to a company with deep experience and expertise in the long-term management of retirement benefits.
“Rather than face benefit reductions amid the Company’s restructuring activity, the retirees covered by this transaction can be confident they will receive the same pension benefit, on the same schedule, as what they currently receive, or expected to receive in the future.”
Steve Whaley, Chair of the Benefit Plan Investment Committee of J. C. Penney Corporation said: “We wanted to find a better solution for our pension plan participants than the distress termination. With the assistance of multiple pension termination experts, we reached an agreement with Athene Holding Ltd. to purchase annuities for all pension plan participants in conjunction with the plan termination.”
Bill Wheeler, President of Athene added: “Pension risk transfer is an attractive solution for plan sponsors interested in a plan termination, including those going through a company restructuring. Athene is well-positioned to provide plan sponsors with customised solutions that achieve their desired objectives while ensuring the financial security of their plan participants.
“Our ability to structure innovative solutions combined with our differentiated investment, actuarial, risk management, operational capabilities, and strong balance sheet leaves Athene uniquely positioned to serve the multi-trillion-dollar defined benefit marketplace.”