The Sound Retirement Trust, a Seattle-based joint labour-management board of trustees that provides grocery workers of contributing employers with retirement benefits, has entered into a bulk purchase annuity contract with Prudential.
The deal will settle approximately $221m of Sound Retirement Trust pension liabilities and provide added retirement security for approximately 8,700 retirees and their beneficiaries.
“Prudential is proud to help protect the life’s work of these Sound Retirement Trust retirees, who literally spent their careers helping to feed Americans,” said Glenn O’Brien, Head of Institutional Retirement Strategies Distribution at Prudential.
“We are excited for the opportunity to apply Prudential’s deep retirement experience and leadership to help these individuals have a secure retirement, so they can live a better life, longer.”
Multiemployer pension plans, like the one sponsored by the board of trustees of Sound Retirement Trust, are retirement programs jointly offered by contributing employers and labour unions and are often referred to as Taft-Hartley plans.
The Taft-Hartley Act of 1947 allows employers in the same industry, such as construction or transportation, or in this case, the retail food industry, to contribute to a retirement plan for union members based on a collective bargaining agreement. Under these plans, union workers can transfer from job to job with minimal disruption in retirement plan participation, as long as their employers have bargained to contribute to the same retirement plan.
“The decision to purchase a group annuity contract to cover 8,700 United Food and Commercial Workers (UFCW) retirees of the Sound Retirement Trust was determined over a year of careful due diligence and deliberation,” said union trustee and President of UFCW Local 3000, Faye Guenther.
“Prudential was selected because of its historic track record as one of the safest annuity providers to guarantee pension benefit payments in the United States.”
“The thoughtful approach by the board of trustees resulted in a win-win for their retirees. The retirees who will receive payments from Prudential benefit from having their benefits secured by one of the leading providers in the PRT industry,” said Michael Clark, Chief Commercial Officer at Agilis and annuity placement consultant to the board for this transaction.
“For the participants that remain in the multiemployer plan, they benefit from the improved net cash flow and reduced funded status risk.”
Prudential will assume responsibility for paying retirement benefits to this transaction’s population of Sound Retirement Trust retirees and their beneficiaries beginning 1st September 2024.