Close Close

Life Health > Life Insurance

MetLife and Prudential Win Big Pension Risk Transfer Clients

Your article was successfully shared with the contacts you provided.
Interior of glass-walled office buildings (Photo: Thinkstock).

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 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 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.

— Connect with ThinkAdvisor Life/Health on Facebook and Twitter.


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.