It looks like the federal government is finally paying attention to the multi-billions being shifted from defined benefit pensions to insurance companies and private equity investors, which has affected so many retirees, including many from the Bell System.
In April of 2023, the U.S. Treasury published a fact sheet outlining their 2023 de-risking strategy.
One of the primary reasons that Treasury found companies engaging in de-risking was for profitability.
What constitutes profitability for any given company is based on varying factors.
The fact sheet confirmed many different challenges that de-risked retirees face, including that organizations managing their retirement assets are being operated outside of the U.S., often in jurisdictions with little to no regulatory or legal guardrails.
While the report clearly outlined the issues with de-risking, it also laid out multiple different actions that the federal government can do to protect retirees who have already experienced de-risking.
Pension de-risking has moved at warp speed in the U.S., with over $250 billion in assets transferred, according to Retirees for Justice. Unfortunately, no one singular government or regulatory action will be beneficial enough to stop this, which is why any solutions must be a multifaceted process.
The Association applauds this small first step to protect those who have been de-risked.
“Retirees need to speak up in support of any responsible legislation or Treasury regulation that forces Plan Sponsors and insurance companies to be more transparent and accountable when it comes to the risk of de-risking from the retiree perspective,” says BellTel Special Counsel Edward Stone. “Retirees should not have to wait until the tide goes out to see who is swimming naked.”
If you would like to read the report in full, it is available on the U.S. Department of the Treasury website.