MetLife and Principal to Provide Annuity Benefits to Philips North America, LLC Retirement Participants
Principal Financial Group and Metropolitan Tower Life Insurance Company, a subsidiary of MetLife, Inc. (“MetLife”), announced today they entered into an agreement with Philips North America LLC (“Philips”) to transfer approximately $1.2 billion of Philips North America Pension Plan obligations to Principal Financial Group (“Principal”) and MetLife. The agreement, which was signed in the fourth quarter of 2020, provides guaranteed retirement income solutions for approximately 11,000 retirees, beneficiaries and deferred participants in the Philips North America Pension Plan.
“MetLife is pleased Philips entrusted us, along with Principal, to provide guaranteed lifetime income to the company’s retirement participants,” said Graham Cox, executive vice president and head of Retirement & Income Solutions at MetLife. “Our expertise at managing longevity and market risk gives pension plan sponsors confidence that their retirees will be well protected, while also allowing Philips to focus on its core business.”
MetLife will act as the lead administrator for the monthly benefits for approximately 9,000 retirees and their beneficiaries in the Philips North America Pension Plan. Principal will have financial responsibility for a portion of these monthly benefits and will settle such obligations directly with MetLife. Principal will have sole responsibility for the approximately 2,000 deferred participants.
The combination of Principal and MetLife’s respective financial strength, retirement expertise and administrative leadership allows Philips to promote long-term security and confidence for its approximately 11,000 retirees, beneficiaries and deferred participants. MetLife and Principal have industry leading capabilities in pension risk transfer (PRT) and created a unique solution that met the needs of Philips. The transaction will not change the amount of monthly pension benefits received by the Philips’ pension plan participants and participants will continue to receive a single payment each month. MetLife and Principal, rather than Philips, will be responsible for making these monthly payments.
“We applaud Philips for selecting an approach that promotes financial security for their participants,” said Joe McCarty, vice president, Retirement and Income Solutions at Principal. “As a leader in the pension risk transfer market, we look forward to bringing our technology and capabilities to the table, including benefit administration services, to serve the complex needs of participants and help them embark on retirement with confidence.”