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Over 100,000 Verizon Retirees Laud New Federal Pension Protection Legislation

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COLD SPRING HARBOR, N.Y. - eTradeWire -- Since 2012, nearly $220 billion has been transferred out of federally protected defined benefit pension plans into less secure group annuities. This process, known as pension risk transfer (PRT) or de-risking, allows companies to pivot from their responsibilities to retired employees who earned the right to a pension.

In 2021, over $40 billion was transferred to annuity providers, with PRT deals happening at a staggering pace.

For pensioners, de-risking presents no upside, as group annuities are far less regulated and secure. Thus, Verizon retirees have come out in strong support of the federal Pension Risk Transfer Accountability Act of 2021/ HR5877) introduced by U.S. Representative Frank J. Mrvan (D-In) and U.S. Senator Chris Murphy (D-CT). The bill is also known as the "PRT Accountability Act."

The PRT Accountability Act would direct the U.S. Secretary of Labor to review fiduciary standards required for choosing the safest annuity provider consistent with the Employee Retirement Income Security Act's (ERISA) protective purposes. The non-profit Association of BellTel Retirees (https://belltelretirees.org/) believes the legislation is necessary to protect retirees' earned benefits.

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In 2012, 41,000 Verizon retirees had their pensions transferred to a group annuity. The wave of de-risking transfers has only grown, concerning retirees about the stability of the entities overseeing their pension payments.

Given that so many insurance companies are being taken over by private equity and hedge fund investors, the PRT Accountability Act (http://www.congress.gov/bill/117th-congress/house-bill/5877/text?r=50&s=1) is poised to provide guidance to companies looking to select the safest annuity provider.

BellTel Chairman Thomas Steed said, "In the last decade, nearly $220 billion in pension assets have been transferred to third party Wall Street investors that cloak their true assets, liabilities, risk portfolio, and management fees. How can retirees trust companies that use shell corporations to evade accountability?"

Mr. Steed added, "Since the federal guidance for pension protections has not been updated since 1995, Congressman Mrvan and Senator Murphy's introduction of HR 5877 is not only welcome but long overdue."

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Edward Stone, Executive Director of the non-profit advocacy group Retirees for Justice, noted, "Once a pension risk transfer has been undertaken, retirees lose all of the uniform protections intended by Congress under ERISA and, as it stands currently, they become subject to 50-different non-uniform state laws, depending on a retirees state of residence at the time of insolvency or impairment of the issuing insurance company. It is truly unfair to retirees across America."

Mr. Stone continued, "Given that retirees lose so much in terms of ERISA protections post-PRT, it is critical that pension plan sponsors undertake rigorous and thorough evaluations of both the claims' paying ability as well as the financial security of any insurer being considered for a PRT in a manner that is consistent with ERISA's fiduciary requirements."

Source: Association of BellTel Retirees

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