Raytheon's Deal with Athene: Are Pensions Still Guaranteed By PBGC?

Raytheon has reached a deal with Athene to transfer the management of its pension plan for specific plan participants, following current developments in corporate pension management. Let's examine another business that reached an agreement with Athene to manage their pension plan in order to see what Raytheon employees who are impacted can anticipate. dfsdfs

During AT&T's transformation, 96,000 retirees' pension assets and obligations were transferred to Athene, a financial company known for overseeing pension group annuities for a variety of businesses. Due to this significant adjustment, AT&T retirees no longer received their monthly payments from the AT&T Pension Benefit Plan; instead, they started receiving them directly from Athene as of their August pension payment. Notably, the change included new processes for retiree health coverage payments and Medicare Part B premium reimbursements, but it left the monthly pension payment amounts unchanged.

Drawing comparisons, it is possible that the transformation in the way pensions were administered for people impacted by Raytheon was comparable. Raytheon most certainly informed the individuals impacted of the precise effects on them, including any modifications to health care payments or additional procedures.

The larger picture of these pension transfers shows that businesses are increasingly turning to private insurers like Athene to handle their pension responsibilities. This change raises serious questions about the stability and safety of private pensions, particularly in light of the fact that pensions under the management of private insurers are not as secure against default as those underwritten by the government-backed Pension Benefit Guaranty Corporation (PBGC). Rather, the onus of ensuring these pensions rests on the insurers, who are subject to state regulation and may be impacted by associations with private equity firms that have different investment objectives.

It's critical for those impacted by Raytheon to comprehend the terms and conditions pertaining to their post-transfer pensions. There is a layer of risk involved with these private pension arrangements since they rely on state guaranty funds instead of the stronger safeguards provided by federal agencies such as the FDIC in the case of insurer collapse.

Athene Holding, a prominent player in the corporate pension buyout market and supported by the private equity firm Apollo Global Management, has proven its ability to handle sizable pension obligations by acquiring $12 billion in corporate pension obligations from a number of noteworthy companies. Raytheon retirees should, however, take into account Athene's financial performance, which includes a reported $1.1 billion loss in Q1 2020, as well as the concerns expressed by Federal Reserve Board researchers regarding the insurer's susceptibility to market shocks. Employees at Raytheon who may be impacted should continue to be watchful, knowledgeable, and proactive in learning how their pensions will be handled and safeguarded.

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