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