Prudential Financial and Reinsurance Group of America (RGA) have been selected for a pension risk transfer involving Verizon Communications, settling approximately $5.9 billion of Verizon pension liabilities and providing retirement security for a population that includes 56,000 Verizon retirees and their beneficiaries.
Under the terms of the transactions, Prudential and RGA will each irrevocably guarantee and assume 50% of the benefit obligation to the retirees, except in certain jurisdictions where Prudential will irrevocably guarantee and assume 100% of the benefit obligation.
The transaction marks the second major pension risk transfer agreement between Prudential and Verizon. In 2012, Prudential completed an approximately $7.5 billion transfer that covered approximately 41,000 of Verizon’s retirees. With this transaction, Prudential has completed four of the six largest U.S. pension risk transfers on record.
Alexandra Hyten, Head of Institutional Retirement Strategies, Prudential, commented, “Prudential is once again proud to help secure the pension benefits of Verizon’s retirees, along with RGA for this transaction, with whom we have a long-standing relationship. That, along with Prudential’s deep experience and leadership in managing and administering retirement benefits, will provide Verizon’s retirees a seamless transition with the superior service they expect and deserve.”
Under this agreement, The Prudential Insurance Company of America, a subsidiary of Prudential Financial, will assume complete responsibility for administrative services, including providing protected retirement income payments to this transaction’s population of retirees and their beneficiaries on behalf of Prudential and, where applicable, on behalf of RGA, beginning July 1st, 2024.
David Lipovics, Senior Vice President and Head of Institutional Markets, RGA, added, “We are proud to work with Prudential to help secure pension payments for Verizon retirees. This transaction ensures the financial protection of retirees and their families. As the second jumbo transaction in 2024, it also underscores continued momentum in the U.S. pension risk transfer market.”
