Prudential has been selected to participate in a $16 billion pension risk transfer transaction with International Business Machines Corporation (IBM), the second-largest pension risk transfer ever in the U.S. market. Under the terms of the agreement, The Prudential Insurance Company of America, a subsidiary of Prudential Financial, Inc. (NYSE: PRU), and Metropolitan Life Insurance Company (MLIC), a subsidiary of MetLife, Inc. (NYSE: MET), will each insure 50% of the pension benefit payments for each of the approximately 100,000 IBM plan participants and beneficiaries included in the transaction.
Prudential will act as the lead administrator in providing protected retirement income payments to this full population of retirees and their beneficiaries included in the transaction beginning Jan. 1, 2023. MLIC will settle the liabilities under its group annuity contract directly with Prudential.
“Prudential is proud to be selected to help secure the pension benefits for this group of retirees and their beneficiaries,” said Scott Gaul, head of institutional retirement strategies at Prudential. “IBM is entrusting the fulfillment of these pension promises to an insurer with deep experience and leadership in managing and administering retirement benefits. Prudential is committed to providing plan participants a seamless transition with the superior service they expect and deserve. This deal is another great example of our strategy in action, as we work to expand access to retirement security, drive business growth and deliver industry-leading customer and client experiences.”
Since 1928, Prudential has been a leader and innovator in the pension risk transfer market, offering pension solutions to companies and organizations across a wide range of industries to better manage their pension risk and costs. Prudential revolutionized the modern pension risk transfer market by pioneering pension buy-outs with General Motors and Verizon in 2012. Many similar transactions followed, including the 2021 risk transfer of the pension liabilities of HP, Inc. Today, with the top three largest pension risk transfers on record, Prudential continues to help employers satisfy their commitments to retiring workers, while providing these companies the freedom to focus on their core businesses.
The Retirement Strategies team at Prudential protects financial outcomes for more than 2 million customers through its lines of Individual Retirement Strategies, including Prudential FlexGuard, FlexGuard Income and PruSecure, and Institutional Retirement Strategies, including U.S. Pension Risk Transfer, International Reinsurance, Institutional Stable Value and Structured Settlements.
Prudential Financial, Inc., a global financial services leader and premier active global investment manager with more than $1.4 trillion in assets under management as of June 30, 2022, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees help to make lives better, creating financial opportunity for more people by expanding access to investing, insurance, and retirement security. Prudential’s iconic Rock symbol has stood for strength, stability, expertise, and innovation for more than a century.
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Disclaimers:
Institutional insurance products (including Prudential’s Traditional Buy-Out, Portfolio Protected Buy-Out, Portfolio Protected Buy-In and Retiree Medical Buy-In) are issued by The Prudential Insurance Company of America (PICA), Newark, NJ, a wholly owned subsidiary of Prudential Financial, Inc. (PFI). PICA is solely responsible for its financial condition and contractual obligations. Guarantees are dependent on the claims-paying ability of PICA and are subject to certain limitations, terms and conditions. Certain insurance products, including PICA’s Portfolio Protected Buy-Out and Portfolio Protected Buy-In, may utilize a separate account established by PICA, in which case amounts contributed to the group annuity contract are deposited into the separate account. The payment obligations specified in the group annuity contracts for such products are insurance claims supported by the assets in the separate account and, if such assets are not sufficient, by the claims-paying ability of PICA, subject to certain limitations, terms and conditions.
Individual insurance products are issued by PICA, Pruco Life Insurance Company (PLAZ), Arizona, a wholly owned subsidiary of PICA, and Pruco Life insurance Company of New Jersey, a wholly owned subsidiary of PLAZ. For more information on FlexGuard, FlexGuard Income and PruSecure visit www.prudential.com/personal/annuities/products.
Before entering into a transaction of the type described herein, you should consider the suitability of the transaction to your particular circumstances and independently review (with your professional advisors as necessary) the specific financial risks as well as the legal, regulatory, investment, credit, tax and accounting consequences.
Products not available in all states.
Reinsurance products are issued by PICA. Neither PICA nor its parent company PFI, headquartered in the United States, is affiliated in any manner with Prudential plc, incorporated in the United Kingdom, or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom. PICA is solely responsible for its financial condition and contractual obligations. PICA is not authorized or regulated by the U.K. Prudential Regulation Authority or regulated by the Financial Conduct Authority, nor does it offer insurance or reinsurance in the United Kingdom. PICA is not authorized or regulated by the Office of Superintendent of Financial Institutions for Canada or by the Financial Services Commission of Ontario. PICA is not authorized or regulated by supervisory authorities in the European Economic Area (EEA). PICA provides insurance products for U.S. pension plans in the United States and off-shore U.K. reinsurance to companies that have acquired U.K. pension risk through transactions with U.K. plan sponsors.
Securities products are offered by registered representatives of Prudential Investment Management Services LLC (PIMS), Newark, NJ.
© 2022 Prudential Financial, Inc. and its related entities. Prudential, Prudential Retirement Strategies, the Prudential logo, and the Rock symbol are service marks of PFI and its related entities, registered in many jurisdictions worldwide. Prudential Retirement Strategies is a PFI business. PICA and PIMS are Prudential Financial companies.
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