Verizon strikes pension deal with Prudential
NEW YORK (AP) — Phone company Verizon Communications Inc. on Wednesday said it will transfer $7.5 billion of its pension obligations to The Prudential Insurance Company of America.
Prudential will take over paying the 41,000 Verizon management retirees covered by a defined-benefit plan that was "frozen" in 2005, meaning no new benefits have accrued since then.
New York-based Verizon said the deal lowers the risk that its pension obligations will end up costing more than projected. It will not affect the amount of payments.
Consulting firm Aon Hewitt, which helped Verizon on the deal, said it was the second largest insured annuity settlement ever in the U.S. This summer, General Motors Corp. said it would settle $26 billion in pension obligations through lump sum payments and purchases of Prudential annuities.
Verizon has a total of $30 billion in outstanding pension obligations.