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Verizon Retirees Sue to Halt Buy-out of DB Plan by Prudential

Though the prospect of more DB plans in large and mid-sized companies is bleak, estimates indicate that there is as much money in private DB plans as there is in DC plans. Companies with DB plans are trying to limit their exposure by either converting them or not including new employees. But the liability remains for those covered by the plan. Prudential has been aggressive in buying or taking over larger DB plans, including $7.5 billion of Verizon’s DB plan — which represents 25% of the overall plan.

But that whole business model may be in jeopardy in the wake of a lawsuit filed by Verizon retirees to halt the deal with Prudential, claiming that it eliminates the insurance coverage provided by the PBGC.

There was a time when people thought that big insurance companies like Prudential were a safe bet. But our thinking changed during the Great Recession, as companies like AIG and The Hartford teetered. What’s the future of pension buy-outs? Stay tuned.
http://www.pionline.com/article/20121129/DAILYREG/121129894/verizon-mana...

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