Earlier today, a federal district judge rejected an attempt by two Verizon retirees to block the $7.5 billion transfer of pension liabilities to Prudential (Lee v. Verizon, N.D. Tex.).  The court denied plaintiffs’ request for a temporary restraining order or preliminary injunction, finding that the plaintiffs did not establish a substantial likelihood of success on their claims that the transaction would violate ERISA.

Continue Reading Verizon May Proceed with $7.5 Billion Pension Settlement, Court Rules

Yesterday, Verizon announced that it will transfer $7.5 billion of pension liabilities to Prudential.  As we previously discussed in this blog, many sponsors of defined benefit plans, especially frozen plans, are considering ways to “de-risk” by reducing or eliminating the volatility associated with their pension obligations for financial accounting and pension funding purposes.  In

Several developments in recent months have made settling pension liabilities look more attractive to sponsors of defined benefit plans seeking to de-risk:  First, Ford and GM announced pension settlements of unprecedented size.  Second, Congress passed a pension funding relief bill, known as “MAP-21,” that could encourage pension settlements.  And, third, the IRS issued three private letter rulings providing useful guidance covering lump sum settlements and annuitizations.
Continue Reading De-risking Through Pension Settlements Becomes More Attractive