Prudential and RGA entrusted to fulfill $5.9 billion in pension promises for Verizon

Prudential Financial, Inc. (NYSE: PRU) and Reinsurance Group of America, Incorporated (NYSE: RGA) have been selected in a pension risk transfer involving Verizon Communications Inc. The transaction will settle approximately $5.9 billion of Verizon pension liabilities and will provide retirement security for a population that includes 56,000 Verizon retirees and their beneficiaries who commenced their benefits before Jan. 1, 2023.

Prudential and RGA will each irrevocably guarantee and assume 50% of the benefit obligation to the retirees, except in certain jurisdictions where Prudential will irrevocably guarantee and assume 100% of the benefit obligation. Prudential and RGA, organizations with a long history of providing lifetime income to individuals, are well positioned to meet this commitment.

The transaction marks the second major pension risk transfer agreement between Prudential and Verizon. In 2012, Prudential completed an approximately $7.5 billion transfer that covered approximately 41,000 of Verizon’s retirees.

“Prudential is once again proud to help secure the pension benefits of Verizon’s retirees, along with RGA for this transaction, with whom we have a long-standing relationship,” said Alexandra Hyten, head of Institutional Retirement Strategies. “That, along with Prudential’s deep experience and leadership in managing and administering retirement benefits, will provide Verizon’s retirees a seamless transition with the superior service they expect and deserve.”

Under the terms of the agreement, The Prudential Insurance Company of America, a subsidiary of Prudential Financial, will assume complete responsibility for administrative services. This includes providing protected retirement income payments to this transaction’s population of retirees and their beneficiaries on behalf of Prudential and, where applicable, on behalf of RGA, beginning July 1, 2024.

“We are proud to work with Prudential to help secure pension payments for Verizon retirees,” said David Lipovics, senior vice president, head of institutional markets, RGA. “This transaction ensures the financial protection of retirees and their families. As the second jumbo transaction in 2024, it also underscores continued momentum in the U.S. pension risk transfer market.”

With this transaction, Prudential has completed four of the six largest U.S. pension risk transfers on record. Since 1928, Prudential has been an innovator in the pension risk transfer market, creating bespoke solutions for companies and organizations across a wide range of industries to help them de-risk and meet their financial objectives.