President’s Forum 144 – NRLN and PRC Launch 2023 Pension De-Risking Proposal to Safeguard Annuities


Mercer, a professional services firm, reported on its global website homepage on February 21, 2023, that the Secure 2.0 Act passed 90 new rules that apply to savings and pensions and that just 8 of them focused solely on single payer DB plan issues. 

Three of the 8 were NRLN proposals: 

  • (1) single payer plans Annual Funding Notice modifications;
  • (2) Changes to Section 420 transfers that can protect retiree healthcare and life insurance, and
  • (3) If a pension plan sponsor does recoupment of over payments, it must be done within three years of initial overpayment; it may not recoup more than 10% of overpayment per year, and it may not recoup against a beneficiary. The NRLN and the Pension Rights Center (PRC) teamed up to win (3), recoupment. 

What is next?

Social Security and Medicare protection and lower prescription drug costs are on the 2023 agenda along with a continued effort to stem pension plan de-risking when a plan is sold to an insurance company.   

NRLN developed a de-risking whitepaper solution and a draft statute. The PRC joined to offer added input, legal advice, edits and support. The joint NRLN/PRC team then produced a set of talking points and included our revised statute proposal that would require that parties to an annuitization must reinsure annuities through a certified third-party insurer. This would be a binding agreement to follow the assets and therefore applies to successor firms and would protect plan participants and their beneficiaries. It would apply to all defined benefit pension plans protected by Employee Retirement Income Security Act (ERISA).  

De-risking is a result of company plan sponsors methodically discontinuing cost of living allowances (COLA), freezing out new entrants and offering 401Ks or IRA plans, lowering investment risk of trust assets, offering lump sum payments, and voluntarily terminating pension plans – permitted by ERISA. Plan terminations caused by a plan sponsor bankruptcy, or outright PBGC plan takeovers are distress terminations (not voluntary), de-risking is not the direct cause of distress terminations.    

While ERISA permits companies to execute a partial or a total voluntary termination of defined benefit pension plans to annuities through third-party insurance companies, there is an increasing risk that insurers of annuities could fail, sell, or transfer assets and liabilities associated with the annuities to yet another insurer, that may not be certified.  

Why can’t we just lobby to stop voluntary terminations? Courts have upheld that plan participants are entitled only to the value of their vested pension plan benefit. While we support an ERISA overhaul, for now our goal is to protect annuities!  

Why the concern?

When a participant’s pension plan is voluntarily terminated and the vested pension benefit is annuitized, protections afforded under ERISA rules are lost, including the right to protection and replacement by the Pension Benefit Guarantee Corporation (PBGC).   

NRLN members from Verizon and General Motors were the first affected in 2012-2013. IBM was the latest. AT&T, and all former Bell System retiree members of NRLN, including those from Ameritech, Bell South, Pacific Northwest Bell, GTE and Embarq and those from Chrysler and other auto industry members, such as Corteva (DuPont), Dow, Union Carbide either have or could be affected by a more partial or total voluntary plan termination. Please be prepared to help us energize a grassroots effort to unify support for our proposal for annuity protections. Watch for emails and Action Alerts 

On February 28 and March 1, 2023, NRLN members attending our Washington, D.C. Fly-In presented our de-risking proposal to Senate and House members and staff. Currently we are meeting with other retiree advocates and targeted members of Congress to encourage the introduction of a bill with our proposed ERISA amendment. 

Sign Up to Receive NRLN Emails

If you know retirees who have not signed up to get NRLN emails, please encourage them to sign up by going to and click on the Email Sign-Up link.

If our emails contain information you are not interested in, please simply delete them, do not unsubscribe or you won’t get new information on this de-risking proposal or other information that would be of interest to you. Watch for an Action Alert, we will need your support.  

Watch for a new video on this subject to stream soon. 

Bill Kadereit, President
National Retiree Legislative Network 

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