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Jun 20, 2020 by |

San Francisco and California Financial Elder Abuse Attorneys: Pension Plan Takeovers


More And More Employers Selling Off Pension Obligations

Insurance Carriers Buy Up Plans

Putting Benefits At Risk

COVID-19 has shattered the US economy and recovery may take decades according to some economists. For seniors and those approaching retirement the effect of the collapse on retirement savings and pension benefits is particularly troubling.  Add to this uncertainty a new concern based on the growing trend of insurance companies to buy up private pension plans. That trend compounds the risks for seniors. The financial elder abuse attorneys at Evans Law Firm, Inc. represent seniors who have lost money through annuities, pension plan defaults, or financial abuse at the hands of insurance agents, advisors, plan administrators, trustees and others. If you or a loved one is a victim of financial elder abuse here in California, call us today at (415)441-8669.

Insurance Carriers Buying Up Pension Plans

Pension obligations are costly and companies have been eager to jettison them in recent years. Insurers have been willing to take on the assets in those plans — such deals have totaled $110 billion since early 2015. That trend has pension advocates concerned. “This is what we’ve worried about — when companies sell off their pension plans,” said Karen Friedman, policy director at the Pension Rights Center, a nonprofit focusing on workers’ retirement security. “Is it safe to transfer money out of pension plans insured by the [government-backed] Pension Benefit Guaranty Corporation to insurance companies where the protections for consumers are scant?”

A number of insurance companies have moved to take over private pension plans. One example is Athene Annuity and Life Company, part of Athene Holding Ltd. According to a recent NBC News story,* roughly 178,000 people rely on Athene for pension benefits. NBC reports that Athene had a $1.1 billion loss in the first quarter of 2020, in part reflecting financial market turmoil. As the NBC story relates, financial markets and Athene have recovered since March 31, but the loss raises questions about risks when insurance companies assume pension obligations. Federal Reserve Board analysts recently published a paper according to NBC that warns of these risks. The paper concludes, “Life insurers have become more vulnerable to an aggregate shock to the corporate sector.”

Why That Creates Risk

About 8.6 million Americans over 65 receive pension payments from a private company plan, and millions more who are still working are paying into private plans. Most of those plans are insured through the government-backed Pension Benefit Guaranty Corporation (the PBGC). When a company defaults on its pension obligations, PBGC pays the pension, in most cases. When private insurance companies take over pension plans, however, those pensions are no longer backed by the PBGC. Typically the carrier converts the plan to an annuity and the obligation to pay is only as good as the carrier’s word. In addition, insurers are regulated by the states, not the federal government, and some are now affiliated with private equity firms, whose focus is often on short-term profits which can conflict with insurers’ long-term obligations. The bottom line here is that the trend of employers to offload pension obligations to insurance carriers may imperil pension benefits in these uncertain times. Keep an eye on that status of your plan.

Contact Us

If you or a loved one has suffered loss on an annuity or retirement plan or suffered any form of financial elder abuse here in California, contact Marin County, San Francisco and California annuity and financial elder abuse attorney Ingrid M. Evans and the other attorneys at Evans Law Firm at (415) 441-8669 (or toll free at 1-888-50EVANS) or by email at <ahref=””></a>. Our attorneys have experience with complex financial contracts and large insurance companies. We can help guide your case through a jury trial or toward an equitable settlement. We handle cases involving physical and financial elder abuse, qui tam and whistleblower law, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.

Leading providers and distributors of  annuities in California are listed below. We are not in any way suggesting that any of these carriers or distributors has done anything wrong. Rather, the list is provided solely as a reference for our readers.

AIG/American General Life Insurance Company
Allianz Life Insurance Company of North America
American Equity Investment Life Insurance Company
American General Life Insurance Company/AIG
American International Group, Inc. (AIG)
American National Life Insurance Company
Athene Annuity & Life Assurance Company
Athene Annuity and Life Company
Athene USA
Aviva Life Insurance Company
AXA Equitable Financial Services, LLC
AXA Equitable Life Insurance Company/AXA US
AXA Advisors, LLC
Brighthouse Financial, Inc./MetLife
EquiTrust Life Insurance Company
Fidelity & Guaranty Life Insurance Company
Genworth Financial, Inc.
Genworth Life and Annuity Insurance Company
Genworth Life Insurance Company
Guggenheim Partners, LLC
Guggenheim Partners/Security Benefit Life Insurance Company
ING USA Annuity and Life Insurance Company
Jackson National Life Insurance Company
John Hancock Life Insurance Company
Lincoln Benefit Life Company
Lincoln Financial Group
Massachusetts Mutual Life Insurance Company
Metlife/Metropolitan Life Insurance Company/Brighthouse Financial, Inc.
Minnesota Life Insurance Company
Nationwide Investor Services Corporation (NISC)
Nationwide Life and Annuity Insurance Company
Nationwide Life Insurance Company
New York Life Insurance Company
Northwestern Mutual Investment Services, LLC
Northwestern Mutual Life Insurance Company
Northwestern Mutual Wealth Management Company
Pacific Life & Annuity Company
Pacific Life Insurance Company
Security Benefit Corporation
Security Benefit Group, Inc.
Security Benefit Life Insurance Company/Guggenheim Partners
Security Investors, LLC
Security of Denver Life Insurance Company/Voya
Transamerica Life Insurance Company
Voya Financial Advisors
Voya/Reliastar Life Insurance Company
World Financial Group Insurance Agency, Inc.

*You can read the entire story here:

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