The Pension Rights Center, a consumer organization that promotes retirement security, says that it will ask Congress to call a halt to companies’ pension buyouts until policymakers can examine whether such transactions pose risks to employees and retired workers.
The center’s call for a moratorium follows Verizon’s announcement earlier this week that it had transferred $7.5 billion of its pension obligations, covering about 41,000 retirees, to Prudential Financial, which will take over making the pension payments. A number of other companies, including General Motors and Ford, have announced plans this year to move pension obligations, and risk, off their balance sheets by offering plan participants lump sums.
The center argues that insurance company annuities could be less secure than a company pension backed by the federal Pension Benefit Guarantee Corp., while lump sum payments mean participants must calculate how to make their money last.
See the Pension Rights Center release here. For more on this topic, see Verizon Transfers $7.5 Billion on Pension Obligations and GM Seen Fueling Pension Deals.