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02 October 2015

Prudential signs pension agreement with JCPenney – continues to innovate in risk transfer market

PHOTO: Peggy McDonald
J. C. Penney Company today announced it has entered into an agreement with The Prudential Insurance Company of America to settle a substantial portion of its retiree pension benefit obligations. The transaction, combined with a lump sum payment offering which concluded in September, is expected to reduce JCPenney's pension liabilities by 25 to 35 percent.

The deal highlights the latest innovation from Prudential in the pension risk transfer space.

"Prudential worked with JCPenney and its advisors to construct an innovative contract and flexible sizing structure for the transaction, which will allow the company to transfer a significant portion of its pension obligations and assets while ensuring the remaining plan will maintain its overfunded status," says Peggy McDonald, senior vice president and actuary for Prudential Retirement's Pensions & Structured Solutions business and transaction lead for the deal. "Prudential’s insurance, pension, actuarial expertise and investment capabilities as well as financial strength uniquely position us to execute these large complex transactions, which help companies manage or reduce the pension risk on their balance sheets while providing lifetime income to their retirees."

The transaction is expected to close in December 2015. Prudential would then assume financial responsibility for making the annuity payments to retirees provided for in the group annuity contract.

Want to learn more? Read the news release. Want to talk to Peggy? Contact Josh Stoffregen.


Josh Stoffregen
phone: 973-802-3996
mobile: 973-204-2540
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