Units of Prudential Financial Inc. and American International Group Inc. today announced “pension risk transfer” deals, or group annuity sales, that led to the insurers absorbing a total of about $3.3 billion in pension obligations.
Prudential’s Prudential Retirement division said it has completed $2.6 billion in pension risk transfer deals with United Kingdom pension plan sponsors.
The deals led to Prudential assuming responsibility for pension benefits for about 16,000 people.
Many U.K. employers have been trying to shed pension risk because of concerns surrounding Brexit-related uncertainty, Prudential said.
The average funding level for a U.K. defined benefit pension plan stood at 100.1% March 29, and that strong level of plan funding has helped to reduce the cost of transferring pension risk through the purchase of a group annuity, Prudential said.
AIG, meanwhile, said its American General Life Insurance Company unit has agreed to assume responsibility for pension benefits for about 8,500 retirees, beneficiaries, and deferred and active members of the pension plan sponsored by Avery Dennison.
Avery Dennison may be best known as a company that makes labels.
— Read Lockheed Martin Makes Pension Risk Transfer Deals with Pru and Athene, on ThinkAdvisor.