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View More Press Releases by The Hartford

Press release:

The Hartford Entrusts Prudential with $1.6 Billion in Pension Obligations for 16,000 Former U.S. Employees

Issued by: The Hartford

Date: June 26, 2017

JUne 26, 2017 -- The Hartford has agreed to settle $1.6 billion of its pension obligations by purchasing a group annuity contract from The Prudential Insurance Company of America, the company announced today. The agreement transfers responsibility for paying the pension benefits of approximately 16,000 of The Hartford’s retirees and former U.S. employees, as well as their beneficiaries. The transaction represents approximately 29 percent of The Hartford’s pension obligations.

This latest decision to transfer of pension obligations suggests the appetite remains strong among U.S. companies for solutions that help them better manage pension risks and costs. Companies have become increasingly concerned about the rising cost and volatility of managing their pension plans, especially in the current low interest rate environment.

The Hartford said this agreement enables it to better manage the long-term costs and risks of its plan. Marty Gervasi, the company’s chief human resources officer, said, “We are pleased this transaction preserves these pension benefits while reducing our long-term pension obligations.”

Peggy McDonald, the senior vice president who led negotiations for Prudential, said, “We are proud that such a well-respected company has recognized the strength and stability of Prudential by selecting us to provide retirement security to 16,000 of their former employees. We welcome these annuitants and are committed to providing them with a seamless transition to Prudential.”

By choosing Prudential, The Hartford is entrusting the promises it made to former employees to a company with deep expertise in ensuring the long-term management of retirement benefits. Individuals whose retirement benefits will be transferred to Prudential will see no changes due to the transaction. Prudential is expected to assume responsibility for paying these benefits in November 2017.

Scott Kaplan, Prudential’s head of Pension Risk Transfer, said, “We remain committed to the pension risk transfer market where our pension and actuarial expertise, investment capabilities and financial strength uniquely position us to execute these transactions, which help companies manage or reduce the pension risk on their balance sheets. Even more importantly, we are committed to keeping their promise to provide lifetime income to their former employees.”

Since 1928, Prudential has offered pension solutions to companies and organizations. Each year, Prudential makes more than $10 billion in pension payments to more than 1 million retirees and their beneficiaries. Prudential is also the global leader in pension risk transfer solutions. This agreement follows several other prominent transactions, including those with General Motors, Verizon, Motorola, Bristol-Myers Squibb, Kimberly-Clark and JCPenney.  

Read The Hartford's news release about the agreement.


View More Press Releases by The Hartford

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