Tag Archives: pension

Retirement Savings as a Political Cudgel in the Debate over FTTs

Our own Richard Shea and Jack Lund recently contributed a post to the RetireSecure Blog maintained by the Pension Research Council of the Wharton School at the University of Pennsylvania.  The post discusses the competing rhetoric surrounding the impact of proposed financial transaction taxes on the American retirement system.… Continue Reading

Action Required for Retirement Plans Covering Puerto Rico Residents

An eight-year transition period for U.S. tax-qualified retirement plans covering Puerto Rico residents is set to end in 2015.  Employers that cover Puerto Rico residents under U.S. tax-qualified plans should consider spinning off the Puerto Rico portion of the plan in 2015, to avoid subjecting Puerto Rico residents to U.S. federal income tax.… Continue Reading

PBGC Proceeds With Proposal to Collect Information on Pension Risk Transfers

The PBGC is proceeding with an initiative to collect information on what it calls “risk transfer activity” in defined benefit pension plans — essentially certain de-risking transactions — as part of the filing plan sponsors make when they pay PBGC premiums.  If approved by the Office of Management and Budget, the PBGC’s draft new premium … Continue Reading

Verizon Prevails (Again) on Motion to Dismiss Challenge to $7.5 Billion Pension Settlement

Seems like we’ve written this before, but this time we (actually a federal district court) really means it:  the court in Lee v. Verizon granted last Friday Verizon’s motion to dismiss a class action lawsuit challenging its transfer in late 2012 of $7.5 billion of pension liabilities to Prudential (Lee v. Verizon, N.D. Tex.).  The … Continue Reading

Private Investment Funds Face Potential Liability for Portfolio Companies’ Employee Benefits

A federal appeals court recently ruled that a private equity fund might be responsible for the unfunded pension liabilities of its bankrupt portfolio company.  This ruling could have broader repercussions for private investment funds and the companies they own.  If the companies are considered to be related employers under the rules that govern employee benefits, … Continue Reading

Verizon Prevails on Motion To Dismiss Challenge to $7.5 Billion Pension Settlement

Earlier today, a federal district court granted Verizon’s motion to dismiss a class action lawsuit challenging its recent transfer of $7.5 billion of pension liabilities to Prudential (Lee v. Verizon, N.D. Tex.).  The court concluded that plaintiffs had failed to state a claim that the transaction violated ERISA’s disclosure and fiduciary obligations.  The court granted … Continue Reading

Investment Funds Not Liable for Pension Plans of Portfolio Companies, Court Rules

Private equity and other investment fund managers can exhale (at least a little bit) following a recent court ruling that investment funds are not liable for the ERISA obligations of their portfolio companies.  The ruling expressly rejects a 2007 Pension Benefit Guaranty Corporation (“PBGC”) letter ruling and contradicts an earlier court decision that supported the … Continue Reading

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

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 … Continue Reading

Verizon Announces $7.5 Billion Pension Settlement

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 April, … Continue Reading

De-risking Through Pension Settlements Becomes More Attractive

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 … Continue Reading
LexBlog