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Athene Hooks $4.9 Billion Annuity Whale

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What You Need to Know

  • The company has assumed responsibility for the retirement income owed to 18,000 Lockheed Martin pension plan beneficiaries.
  • The company says the pipeline for commercial pension risk transfer deals looks strong.
  • Athene has assumed responsibility for pension obligations for a total of about 300,000 people since 2009.

Athene Holding Ltd. has agreed to assume responsibility for $4.9 billion in pension benefits owed to about 18,000 Lockheed Martin pension plan participants.

All of the participants involved in the pension risk transfer deal are already collecting pension benefits, Athene announced Tuesday.

Two Athene insurance company subsidiaries will implement the transfer using a combination of a large group annuity and individual annuity certificates, according to the announcement.

The Players

Athene is a Hamilton, Bermuda-based annuity issuer that was founded in 2009 and now has about $206 billion in assets.

In 2018, the company assumed responsibility for $800 million in pension obligations owed to about 9,000 Lockheed Martin retirees and beneficiaries.

Lockheed Martin is an aerospace and defense company with about 114,00 employees.

Over the years, Athene has handled pension risk transfer arrangements for a total of about $19 billion in pension obligations owed to 300,000 annuitants.

How Big Is Big?

Athene’s pension risk transfer business is getting to be comparable in size to the Pension Benefit Guaranty Corp.’s (PBGC) single-employer pension plan administration operation.

The missions of the organizations are different. Athene assumes responsibility for solvent pension plans sponsored by employers that can pay for its services. The PBGC is a government-sponsored enterprise that insures pension plan benefits. It seizes control of failed pension plans from struggling or defunct employers.

But the PBGC does engage in a form of pension risk transfer. The government-sponsored enterprise has served as the trustee for failed pension plans with a total of about $112 billion in pension obligations from 1975 through 2019, and a total of about $40 billion in pension obligations over the period when Athene has been in operation, according to PBGC data.

The Future

Athene said the pipeline for commercial pension risk transfer deals looks strong.

“We are seeing companies place increasing emphasis on reducing pension risk in order to focus on core business,” Bill Wheeler, Athene’s president, said in a comment on the state of the market.

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