As class action lawsuits increase over pension risk transfers, IBM has announced that it entered into a $6 billion PRT agreement with Prudential Insurance Company, completed on Sept. 11. The deal comes after the technology firm, once a leader in the shift away from defined benefit plans defined contribution plans in the '80s, switched to a "hybrid pension" plan in 2023.
Under the terms of the transaction, IBM has purchased a single premium group annuity contract that transfers $6 billion of the company's Personal Pension Plan's defined benefit pension obligations to Prudential. The insurer will assume responsibility for making retirement benefit payments to approximately 32,000 retirees and beneficiaries.
"Under the group annuity contract, Prudential has made an irrevocable commitment, and will be solely responsible, to pay the pension benefits of each Transferred Participant that are due on and after January 1, 2025," according to the SEC filing.
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