Skip to main content

You are here

Advertisement

Judge Dismisses Suit Over Verizon Buyout

Last December, a judge allowed a lawsuit by Verizon retirees to halt the sale of $7.5 billion or 25% of their DB plan to Prudential to proceed. The suit claimed that the sale wiped out the pensioners’ insurance protection under the PBGC. Now a U.S. district court has dismissed the suit because the court did not believe that the purchase of an annuity was a fiduciary function or that the $1 billion premium payment was unreasonable. The plaintiffs have 30 days to file an amended complaint.

Pension buyouts by insurance companies are expected to be more popular as companies try to get out from under long-term liabilities, especially with people living longer. The Verizon suit seems to cast a pall over that business and will continue to do so until it is resolved.

Advertisement