MetLife to Take On Pension Benefits for FedEx Retirees and Beneficiaries
Approximately 41,000 FedEx retirees and beneficiaries in defined benefit pension plans will receive annuity benefits.
According to MetLife, the pension risk transfer (PRT) agreement involves pension obligations of $6 billion—a grouping of cash and assets from the pensions plans.
“By taking on a portion of the payment obligations of the FedEx defined benefit pensions plans, we will help FedEx secure its pension obligations and provide its retirees with financial security,” says Michael Khalaf, president, U.S. Business and EMEA at MetLife.
MetLife’s 2017 Pension Risk Transfer poll found 57% of plan sponsors are attracted to an annuity buyout option for DB plans—an increase from 46% in 2015. Additionally, 77% of those interested said they would likely implement a buyout within the next two years.
The insurance company says FedEx will buy a group annuity contract from MetLife, which then will be responsible for benefit payments to covered retirees and beneficiaries. The agreement will not alter monthly benefits for annuitants.
According to the company, further details will be delivered to retirement participants and beneficiaries with continuing payments to be made by MetLife.