NEWARK, N.J.--(BUSINESS WIRE)--Raytheon (NYSE: RTN) will reduce its pension obligations by $923 million by purchasing a group annuity contract from The Prudential Insurance Company of America, a subsidiary of Prudential Financial, Inc. (NYSE: PRU). The agreement transfers the responsibility for paying certain pension benefits to approximately 13,000 U.S. retirees, as well as their beneficiaries, from Raytheon’s previously discontinued operations.
The decision to transfer a portion of Raytheon’s pension obligations to Prudential highlights a growing trend among U.S. companies. Corporations that offer defined benefit pension plans are increasingly looking to move some of their obligations due to the increasing risks and costs of maintaining large plans.
Peggy McDonald, the senior vice president who led negotiations for Prudential, said, “Prudential is proud to have been chosen to provide retirement security for this group of Raytheon’s retirees and their beneficiaries. We are committed to providing them with a seamless transition.”
As a result of the transfer, Prudential will be responsible for making continuing payments to the affected retirees and their beneficiaries, in accordance with the group annuity contract.
Scott Kaplan, Prudential’s head of Pension Risk Transfer, said, “Prudential is a unique player in the pension risk transfer market, a market that it helped create. Our pension and actuarial expertise, along with our investment capabilities and deep financial resources, help our clients reduce pension risks while allowing them to focus on their core businesses.”
Since 1923, Prudential has offered pension solutions to companies and organizations. In 2017, Prudential made more than $11 billion in pension payments to more than 1.3 million retirees and their beneficiaries. Prudential is the global leader in pension risk transfer solutions.
About Prudential Financial, Inc.
Prudential Financial, Inc. (NYSE: PRU), a financial services leader with more than $1 trillion in assets under management as of March 31, 2018, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. For more information, please visit news.prudential.com.
Prudential Retirement delivers retirement plan solutions for public, private, and nonprofit organizations. Services include defined contribution, defined benefit and non-qualified deferred compensation recordkeeping, administrative services, investment management, comprehensive employee education and communications, and trustee services, as well as a variety of products and strategies, including institutional investment and income products, pension risk transfer solutions and structured settlement services. With more than 85 years of retirement experience, Prudential Retirement helps meet the needs of 4.3 million participants and annuitants. Prudential Retirement has $427.6 billion in retirement account values as of March 31, 2018. Retirement products and services are provided by The Prudential Insurance Company of America (PICA), Newark, N.J., or its affiliates.