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Insurers announced two giant pension risk transfer deals Wednesday.

A unit of MetLife Inc. has agreed to assume responsibility for about $6 billion in defined benefit pension obligations for 41,000 retirees and beneficiaries in FedEx pension plans.

A unit of Prudential Financial Inc. has agreed to assume responsibility for about $1.2 billion in pension obligations to 7,500 pensioners from Pension Insurance Corp. PLC of the United Kingdom.

(Related: Alcoa Plans to Buy Pension Risk Transfer Annuities)

In a pension risk transfer arrangement, one party takes the shoulders of making good on pension plan promises from another party.

MetLife

MetLife says the FedEx pension risk transfer is the largest U.S. deal of its kind announced in the past five years.

FedEx will execute the arrangement by buying a large group annuity contract from Metropolitan Life Insurance Company.

The transaction will not change the monthly benefits amount for any annuitant, MetLife says.

MetLife already manages pension payments for 600,000 annuitants.

Prudential

Prudential says its Prudential Insurance Company unit will be the entity taking responsibility for the Pension Insurance Corp. pension risk.

The deal is the first pension risk transfer agreement Prudential has announced this year, but the company notes that has already completed fifth other pension risk transfer transactions with the U.K. company in the past three years.

The new transaction affects two pension plans.

All Prudential-Pension Insurance Corp. risk transfer deals combined affect responsibility for a total of $6 billion in pension obligations.

— Read S&P Eyes Pension Risk Transfer Business on ThinkAdvisor.

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