Insights & Publications
Diversity & Inclusion
© 2019 Debevoise & Plimpton LLP
Court Rejects ERISA Challenge to Pension De-Risking Transaction
18 December 2012
View Client Update
While employers have always had the ability to manage the balance sheet effects associated with defined benefit pension plan underfunding through the purchase of annuities, these "de-risking" transactions have taken on greater prominence in recent months because of two large, transformative transactions.
In a recent proceeding seeking to enjoin a pension de-risking transaction involving the purchase of a large annuity from Prudential by Verizon's pension plan, a federal district court in Texas rejected a number of claims under ERISA, including holding that the transaction will not result in a breach of fiduciary duty under the ERISA or a "loss of benefits" to participants with respect to the claims presented.
Although not likely to be the final word on de-risking transactions, this favorable ruling is a helpful roadmap for companies considering similar de-risking transactions for their defined benefit plans to improve their financial profile.
Employee Benefits & Executive Compensation
Jonathan F. Lewis
Nicholas F. Potter
Edwin G. Schallert
UK Modern Slavery Act Transparency Statement
Debevoise Women's Review