RGA completes $700 million pension risk transfer transaction

RGA completes $700 million pension risk transfer transaction | Insurance Business New Zealand

Reinsurance

RGA completes $700 million pension risk transfer transaction

Transaction oversees 2,000 retirees

Reinsurance

By
Kenneth Araullo

Reinsurance Group of America (RGA) has finalized a major pension risk transfer (PRT) agreement that involves approximately 2,000 retirees.

The reinsurance group has partnered with Legal & General Retirement America (LGRA) for the transaction valued at $700 million with FirstEnergy, involving about 8% of the company’s total pension obligations from its former generation subsidiaries.

The deal, completed in December, saw LGRA taking the lead, assuming full responsibility for the administration and service of all participants involved in the transfer. FirstEnergy’s decision to engage in the transaction was supported by advisory services from Aon and legal counsel from K&L Gates.

In a news release, David Lipovics, senior vice president, head of institutional markets at RGA, highlighted the company’s commitment to offering risk management solutions to US pension plans.

“This latest transaction is a natural extension of our 15-year history of support in the global pension risk transfer market and demonstrates our ability to provide trusted financial solutions in the US retirement space,” Lipovics said.

George Palms, president of LGRA, also emphasized the value of the collaboration with RGA in providing a risk management solution to FirstEnergy and its pensioners.

“We take great pride in our level of dedicated customer service and through this transition, we look forward to servicing and protecting the retirement income for these participants,” Palms said.

“Importantly, these pension benefits remain protected and retirees of our former subsidiaries and beneficiaries will see no changes in the value of their benefits as a result of this transition,” FirstEnergy director of total rewards April Marx said.

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