NEW YORK--(BUSINESS WIRE)--Towers Watson (NYSE, NASDAQ: TW), a global professional services company, today announced Towers Watson Longitude Solution for retiree medical exit. By using customized group annuities and an innovative transaction structure, the patent-pending solution is designed to allow U.S. employers to overcome the traditional barriers to fully exiting their legal, accounting and regulatory responsibilities for retiree medical benefits. The solution should also give retirees security and peace of mind, as the annuity guarantees tax-free funding for medical benefits from a highly rated insurance company for the rest of their lives.
“Over two years, Towers Watson has worked with the nation’s foremost legal, accounting and tax experts to develop a retiree medical exit that is tax-favorable to sponsors,” said John Haley, chief executive officer, Towers Watson. “Longitude Solution, supported by top insurers, is the elegant result of that effort.”
“Most large employers consider retiree medical benefits an expensive obligation with little shareholder value,” said Mitchell Cole, managing director, Towers Watson Retiree Insurance Solutions. “The benefits do not engage or attract new talent, yet they create balance sheet volatility and income statement expense, and divert management time. Historically, employers that wanted to exit retiree medical without adverse consequences to both the company and their retirees couldn’t do so. Now they can.”
Added Cole, “To our knowledge, Longitude Solution is the first-ever retiree medical exit solution that creates economic value for both companies and their retirees.”
Simple Turnkey Solution to a Complex Problem
Longitude Solution is a turnkey solution, with Towers Watson assisting employers throughout the entire process. Towers Watson and outside experts help employers with the legal, actuarial, and accounting evaluation and documentation necessary to consider and implement the solution.
For the group annuity portion of the solution, employers can select a life insurer from a list of Towers Watson’s preferred partners. Towers Watson then guides employers through a streamlined RFP process with transparent pricing. Towers Watson also works with employers to introduce the solution, and explain its advantages and how it works to retirees.
Longitude Solution is available to existing and prospective clients of the Towers Watson OneExchange private Medicare exchange. “We see our retiree medical exit solution as the natural extension of the value proposition to our clients of our private Medicare exchange,” said Haley. “Transitioning retirees to a private exchange reduces the cost and administrative burden of retiree medical. The exit solution is the end of a journey that our clients begin when a company adopts a private Medicare exchange.”
U.S. companies that wish to learn more about Longitude Solution can contact Towers Watson Retiree Insurance Services at +1 215 246 6254.
About Towers Watson
Towers Watson (NYSE, NASDAQ: TW) is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. The company offers consulting, technology and solutions in the areas of benefits, talent management, rewards, and risk and capital management. Towers Watson has more than 14,000 associates around the world and is located on the web at towerswatson.com.
This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements and other forward-looking statements in this document by words such as “may,” “should,” “will,” “would,” “expect,” “anticipate,” “believe,” “knowledge,” “estimate,” “plan,” “intend,” “continue,” “design” or similar words, expressions or the negative of such terms or other comparable terminology. Such statements are based upon the current beliefs and expectations of Towers Watson’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.
The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: a lack of clients wishing to exit retiree medical plan sponsorship; the risk of a disclosure breach of company or client data; our ability to protect client data and our information systems; the risk that potential changes in federal and state health care regulations, or future interpretation of existing regulations, may have a material adverse impact on our business; the risk that the acquisition of Extend Health is not profitable or is not otherwise successfully integrated within Towers Watson or with Longitude Solution; the risk that our Exchange Solutions or OneExchange businesses fail to maintain good relationships with health insurance carriers; our ability to establish the Towers Watson Retiree Insurance Services business, and secure agreements with commercial life insurance carriers to issue Longitude Solution; the risk that the price of Longitude Solution is significantly higher than the cost of maintaining plan sponsorship; the risk that changes and developments in the health insurance system, or the tax code, in the United States could harm our business; changes in the tax code, ERISA, or other laws and regulations; a different interpretation of laws and regulations applicable to Longitude Solution from what we expect based on advice received from counsel; our ability to respond to rapid technological changes; the ability to recruit and retain qualified employees and to retain client relationships; and the risk that a significant or prolonged economic downturn could have a material adverse effect on Towers Watson’s business, financial condition and results of operations. Additional risks and factors are identified under “Risk Factors” in Towers Watson’s most recent Annual Report on Form 10-K filed with the SEC.
You should not rely upon forward-looking statements as predictions of future events because these statements are based on assumptions that may not come true and are speculative by their nature. Towers Watson does not undertake an obligation to update any of the forward-looking information included in this document, whether as a result of new information, future events, changed expectations or otherwise.