Annuity.com
  • Home
  • Articles
    • Annuities
    • Bonds
    • Estate Planning
    • Investing
    • Retirement Planning
    • Social Security
  • Invited Authors
  • Resource Library
  • Honors
  • Search
  • Menu Menu

Syndicated Columnists
Syndicated Columnists works with local community-based publications that wish a local approach to information. We believe the local reader wants to read informational content presented by an expert in their community. By providing original subject matter focused on the financial market, our articles are diverse, easy to understand, and targeted to the interested reader. The goal is to bring quality informational writing to the local market. "We believe Local Content is Good Business." Website: syndicatedcolumnists.org

Syndicated Columnists

Glass, Toilet Paper And Cell Phones

June 28, 2021/in Annuities/by Syndicated Columnists

What do glass, toilet paper, and cell phones all have in common?

The answer is this; three large American companies have turned to annuities to offset uncertainty in their pension obligations.

PPG Industries, Kimberley Clark, and Verizon are only three examples of large companies buying their way out of unknown future pension obligations. In other words, they outsourced the responsibility. In doing so, these companies could corral much of their future pension expenses into one payment. From then on, it was someone else’s problem. Once they wrote the check, they could legitimately know their future obligation, and their responsibility was over.

In PPG, their pension fund had liabilities of $5.35 billion and only assets in the pension fund of $4.63 billion. The difference between what is owed to those retiring (and retired) and what was available would have been PPG’s problem. Since people are living longer, it was impossible to estimate the liability accurately. By outsourcing the responsibility to companies who deal with these issues, the problem was solved (or passed on).

Is it ok with the employees (and retirees) of PPG? Sure, all they want is what was promised, and the companies handling that obligation (MetLife and MassMutual) are certainly able to fulfill their new assumed obligations. Kimberley Clark, Verizon, pension fund, Bill Broich, stock increase

What is the result of this action?

Obviously, PPG stock will rise, and retirees are no longer concerned about pension payments. One significant “other” benefit to PPG is they have now reduced their obligation to the federal program, the Pension Benefit Guarantee Corporation (PBGC), by lowering the cost of their pension obligations. Payments were required to be paid to PBGC to help cover any cost of failure with all pensions nationally.

What is currently happening in the movement of de-risking will be common practice. So let those who know how to provide retirement benefits (annuity companies) shoulder the burden, and the stockholders will love it; it looks like a win/win deal.

Share this entry
  • Share on Facebook
  • Share on Twitter
  • Share on LinkedIn
0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *

Get Your Free Safe Money Guide


Our 20th edition, the standard of the industry.

Click here for Best Annuity Rates

Recent Posts

  • Is Now The Time To Consider Rolling Your 401k Over Into An IRA?
  • The Reallocation Factor
  • Portfolio Allocation Monkey Business
  • Should Your Insurance Expert Be A Chartered Life Underwriter (CLU)?
  • Why Are Annuities So Popular When The Economy Is In A Downward Spiral?

Categories

  • Annuities
  • Bonds
  • Estate Planning
  • Investing
  • Retirement Planning
  • Social Security

Archives

Free Safe Money Book

Free Safe Money Guide

Free Social Security Claiming Guide

© 2022 Annuity.com | A National Organization Focused on Truth, Transparency, and Trust.

For Licensed Agents | Find An Agent | About | Contact | Glossary | Terms of Use |  Privacy Policy | Website Accessibility

Web Design by BPA

Scroll to top