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Verizon retirees sue to stop transfer of pensions

Published on NewsOK Modified: November 29, 2012 at 3:41 pm •  Published: November 29, 2012

Randal S. Milch, New York-based Verizon's general counsel, said the suit lacks merit, adding that Prudential has a long history of providing group annuity benefits.

"Prudential is providing an irrevocable commitment to make all future annuity payments, and this promise will be supported by the extra protection of assets being placed in a separate account at Prudential dedicated to Verizon retirees," Milch said.

When it was announced, Verizon said the deal lowers the risk that its pension obligations will end up costing more than projected.

Consulting firm Aon Hewitt, which helped Verizon on the deal, said it was the second largest insured annuity settlement ever in the U.S. This summer, General Motors Corp. said it would settle $26 billion in pension obligations through lump sum payments and purchases of Prudential annuities.

Verizon has a total of $30 billion in outstanding pension obligations including the $7.5 billion slated to be transferred to Prudential.