Prudential announced it will participate in a $1 billion dollar pension risk transfer (PRT) with Public Service Enterprise Group (PSEG), a utilities group and energy company.
The deal is anticipated to fulfill pension plan obligations for 2,000 retirees previously employed by PSEG Power & Other, a PSEG business segment. Prudential will assume pension benefit payments starting December 31.
“Prudential is proud to help meet the retirement security needs of these 2,000 PSEG retirees, and to continue being a market leader in expanding access to retirement security,” said Alexandra Hyten, head of Institutional Retirement Strategies for Prudential, in a statement. “We are confident that our rock-solid service delivery and experience in navigating market complexities will serve retirees well, helping to protect the lifetime income they’ve worked hard to earn.”
“Protecting future benefits for our retirees is something we take very seriously, and an independent fiduciary was retained for their expertise and process to select a financially strong and leading group annuity provider,” added Sheila Rostiac, senior vice president and chief HR officer at PSEG. “We are working with Prudential to ensure a seamless transition for retirees.”
A recent survey by LIMRA found pension risk transfer sales continue to rise in 2023. According to the organization’s U.S. Group Annuity Risk Transfer Sales Survey, PRT sales reached $16.2 billion in Q2 2023, a 31% increase compared to the same time last year. Furthermore, PRT sales closed at $22.5 billion within the first six months of 2023—a 28% rise from 2022.
“Record sales in the first half of the year, combined with carriers signaling expectations for a busy second half of 2023, suggest the U.S. PRT market could approach record sales set in 2022,” said Mark Paracer, assistant research director at LIMRA annuity research, in a statement at the time. “The robust growth in contracts in the first half of the year is also a newer trend. In past years, much of the business occurred in the fourth quarter. More recently we are seeing the activity spread out throughout the year, as market expansion has led to more competitive pricing and increased plan sponsor interest.”
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.