Prudential Insurance has struck a deal with General Motors, which will allow Prudential to assume certain salaried retiree benefit obligations as part of GM’s plan to reduce pension obligations by nearly $26bn.
The agreement is anticipated to close by December of current fiscal, GM plans to purchase a group annuity contract from Prudential.
Prudential will then assume responsibility for providing benefits to GM’s salaried retirees covered by the agreement, who retired before 1 December 2011.
Commenting on the landmark agreement, Prudential Retirement president Christine Marcks said that the deal allows GM to maintain the value of US salaried pension benefits for its retirees while significantly reducing its pension obligations.
"With our financial strength, investment capabilities and actuarial expertise, Prudential is uniquely suited to assume the responsibility of guaranteeing pension benefits; it has been a core business for Prudential since 1928," Marcks added.
Prudential Financial offers underwriting and financial services, including life insurance, annuities, retirement-related services, mutual funds and investment management across the US, Asia, Europe, and Latin America.