ERD50
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I'll post the link with my comment next time. Sorry for the confusion.
- Retirees will receive monthly payments from Athene instead of the AT&T Pension Benefit Plan.
- However, in Q1 2020, Athene Holding reported a $1.1 billion loss, in part due to financial market turmoil, which raises questions about the risks involved in its investments.
- “This is what we’ve worried about — when companies sell off their pension plans,” said Karen Friedman, policy director at the Pension Rights Center, a nonprofit focusing on workers’ retirement security.
- Unlike pensions insured through the Pension Benefit Guaranty Corporation (PBGC), pensions taken over by private insurance companies such as Athene are no longer backed by the PBGC and are instead backed by the insurers themselves.
- Furthermore, insurers are regulated by individual states, not the federal government, and some are affiliated with private equity firms whose short-term profit focus can conflict with the long-term obligations of the pension plans.
https://www.theretirementgroup.com/blog/atts-retiree-pension-payments-taken-over-by-athene
OK, thank you. Surprising to me, and very interesting and a bit disconcerting. But it appears that in these cases, the PBGC is looking at the state guarantee as being as good as the PBGC guarantee (yes, that's debatable).
However, it does seem to be a pretty rare case, as I read it, the pension must be fully funded for the PBGC to allow this sort of transfer:
https://www.pbgc.gov/about/pg/other/how-pension-plans-end
The employer can end the plan in a standard termination but only after showing PBGC that the plan has enough money to pay all benefits owed to participants. The plan must either purchase an annuity from an insurance company (which will provide you with lifetime benefits when you retire) or, if your plan allows, issue one lump-sum payment that covers your entire benefit. Before purchasing your annuity, your plan administrator must give you an advance notice that identifies the insurance company (or companies) that your employer may select to provide the annuity. PBGC's guarantee ends when your employer purchases your annuity or gives you the lump-sum payment. A state guaranty association may insure all or part of your annuity in such a case.
If the plan is not fully funded, the employer may apply for a distress termination if the employer is in financial distress. To do so, however, the employer must prove to a bankruptcy court or to PBGC that the employer cannot remain in business unless the plan is terminated. If the application is granted, PBGC will take over the plan as trustee and pay plan benefits, up to the legal limits, using plan assets and PBGC guarantee funds.
edit/add: oooops, I see few others provided similar info that I did not see before I posted... and, I went back and caught my earlier post in time to edit it and reference this information.
-ERD50
Last edited: