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DOL Supports Pension Risk Transfers (PRTs)

yogibearbullyogibearbull
in Other Investing
https://ybbpersonalfinance.proboards.com/thread/985/supports-pension-risk-transfers-prts
https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/2026/01/EBSA20260066.pdf

A growing benefits-industry trend is for existing pension obligations to be transferred to insurers as PRTs (pension risk transfers). Superficially, it simplifies corporate/ institutional balance sheets & beneficiaries just see the switch in the source of payments from companies/institutions to insurers. But there are deeper issues:

Pensions are covered by ERISA (under EBSA/DOL), insurer annuities are not.

Pensions are covered by PBGC (self-financed government corporation) guarantees, insurer annuities are covered by weaker regulations under state insurance departments.

Beneficiaries are exposed to risks of insurer downgrades or bankruptcies without any options - initially for PRTs, or later for exits if the insurer gets into trouble

etc

In ongoing lawsuits related to these pension transitions as PRTs, the DOL has files a friend-of-the-court (amicus) briefing supporting PRTs.

If big insurers are involved in PRTs, these issues may be less concerning, but become important if smaller or less creditworthy insurers are involved. While some PRTs may make sense, there is potential of abuse if this just left as corporate/ institutional decision.

Comments

  • Old_JoeOld_Joe
    The DOL may be a "friend" of the court, but it sure as hell is no friend of those who have worked their entire lives for a pension that is no longer protected by ERISA.
  • CrashCrash
    The Orange regime, including its D.O.L, is a massive bucket of three-week-old spooge. They want no regulations, no oversight at all, because of course, Big Money can be trusted to police itself..... Right????? Alan Greenspan told us that. You should believe it! ORK?
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