A combination of chronic underfunding, new mortality assumptions and increasing premiums and liabilities is pushing corporations with pension plans to transfer their pension risk using annuities, according to Prudential Financial, which facilitates such transactions.
Prudential, which has its Retirement Insurance and Annuity Co. in Hartford, said it has facilitated approximately $39 billion in pension buyouts since 2012. The total in the U.S. market during that time has been $49 billion, according to Prudential.
The company’s pension buyout transactions have included General Motors and Bristol Myers Squibb, which has a Wallingford campus.
A Prudential survey last year found that nearly half of senior financial executives thought it likely that their company would transfer pension risk to a third-party insurer in the next two years.
Correction: The original version of this story incorrectly stated that Prudential had facilitated a pension buyout for General Electric. The transaction was with General Motors.
