This is why you’re seeing many of them using the safety of annuities to shield themselves from pension liabilities and risks of the coming bear market taking back nine years of gains.
December 05, 2017
Yesterday (Dec. 4, 2017), Molson Coors transferred nearly $1 billion in pension liabilities to an annuity with Athene Annuity and Life Company, according to a report by “Pensions & Investments.” The $900 million amount represents almost a third of Molson Coors’ total pension assets.
Athene will assume responsibilities for making the monthly payments to more than 6,000 beneficiaries of the Molson Coors pension plan, reported “Business Wire,” beginning on May 1, 2018.
During the second-longest bull market in U.S. history, with expected rises pending on the passage of current tax legislation, why would Molson Coors choose to place this money in an annuity instead of maximizing its returns in the market?
As CEO/Founder of Denver-based Tucker Financial Solutions, Karlan Tucker reviews such financial news as part of a growing overall trend. “Corporations are often more sensitive to market risks than individual investors,” said Tucker. “This is why you’re seeing many of them using the safety of annuities to shield themselves from pension liabilities and risks of the coming bear market taking back nine years of gains.”
Pensions & Investments also reported that in November CBS Corp. transferred $800 million in its pension plan liabilities into a group annuity. CBS did not identify the name of the insurance company or how many retirees would be affected, but the transfer accounts for about 20% of the broadcaster’s total plan liability.
In a Securities and Exchange Commission notification last month corroborated by Pensions & Investments, Missouri-based Leggett & Platt, Inc. disclosed that it was planning to purchase a group annuity contract to transfer some of its $214.1 million total in pension plan assets. The purchase would take place in the fourth quarter and serve those retirees currently receiving smaller monthly benefits, in part, the company said, “…to reduce (the) volatility of contribution requirements.”
When Tucker reviews the large gap between most…