NEW YORK--(BUSINESS WIRE)--Metropolitan Life Insurance Company (Metropolitan Life) announced today that it has entered into an agreement with FedEx Corporation (FedEx) to provide annuity benefits to approximately 41,000 retirees and beneficiaries in the FedEx defined benefit pension plans, representing pension obligations of approximately $6 billion.
“We are very pleased to have been selected to provide pension benefits for FedEx retirees and beneficiaries,” said Michel Khalaf, President, U.S. Business and EMEA at MetLife. “By taking on a portion of the payment obligations of the FedEx defined benefit pension plans, we will help FedEx secure its pension obligations and provide its retirees with financial security. This is something MetLife has been doing for nearly 100 years.”
This is the largest U.S. pension transaction by premium in the last five years and continues the market trend of more plan sponsors choosing to transfer their pension obligations to insurance companies. According to MetLife’s 2017 Pension Risk Transfer poll, 57% of plan sponsors – up from 46% in 2015 – are interested in annuity buyouts for their defined benefit plans. Of those interested, 77% said they are likely to do so in the next two years.
“At MetLife we are focused on delivering value for our customers every step of the way,” said Khalaf. “We have been investing in our administrative capabilities and enhancing our processes to deliver best-in-class service.”
This transaction, subject to certain conditions, is expected to close on May 10, 2018. It will be executed by a combination of cash and assets of the Pension Plans. FedEx will purchase a group annuity contract from Metropolitan Life and the insurance company will assume responsibility for making benefit payments to the retirees or their beneficiaries covered by the agreement. The transaction will not change the amount of the monthly benefit for any annuitant. Metropolitan Life, rather than FedEx, will be responsible for making these monthly payments following the close of the transaction. Plan participants do not need to take any action at this time. Details will be provided to retired participants and beneficiaries whose continuing payments will be fulfilled by Metropolitan Life.
MetLife is a market leader in the pension risk transfer industry. Metropolitan Life manages pension payments for more than 600,000 annuitants; the company issued its first group annuity contract in 1921 to fund a defined benefit plan.
In 2017, MetLife's Retirement & Income Solutions Customer Solutions Center team was recognized for the second consecutive year by J.D. Power for providing "An Outstanding Customer Service Experience" for the Live Phone Channel. MetLife's Retirement & Income Solutions business includes U.S. Pensions, Institutional Income Annuities and Structured Settlements, in addition to other institutional retirement product areas.
MetLife, Inc. (NYSE:MET), through its subsidiaries and affiliates (“MetLife”), is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management to help its individual and institutional customers navigate their changing world. Founded in 1868, MetLife has operations in more than 40 countries and holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit www.metlife.com/about.
About FedEx Corp.
FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenues of $64 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world's most admired and trusted employers, FedEx inspires its more than 425,000 team members to remain "absolutely, positively" focused on safety, the highest ethical and professional standards and the needs of their customers and communities. To learn more about how FedEx connects people and possibilities around the world, please visit about.fedex.com.
Note to editors: Metropolitan Life Insurance Company (Metropolitan Life) is a subsidiary of MetLife, Inc.