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Sears Transfers Pension Liabilities to MetLife in “De-risking” Move

Beginning August 1, 51,000 participants will receive benefit payments from MetLife.

By Poonkulali Thangavelu

Joining the trend towards “pension de-risking,” Sears Holdings Corp. (SHC) has annuitized $515 million of its pension liabilities with Metropolitan Life Insurance Company. Under the agreement, MetLife will become responsible for paying future pension benefits to about 51,000 Sears retirees.

The move will reduce Hoffman Estates, Illinois-based Sears’ pension plan, and protect it from rising future costs and plan administration expenses. Discussing the move on the company’s first quarter conference call, Rob Riecker, the company’s chief financial officer, said that the transfer reduced the size of Sears Pension Plans by about 51,000 participants. The company has contributed more than $3.7 billion to the plan since 2005.

Beginning on August 1, these participants will receive their pension benefit payments from MetLife. They will receive the same benefit amounts they received from Sears.

In a communication to impacted pension plan beneficiaries, Sears noted, “SHC determined that purchasing a group annuity contract for selected retirees from an insurance company would be an efficient way to continue delivering pension benefits for approximately 50,000 retirees (including beneficiaries), while also controlling the cost and reducing business risk.”

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Other companies that have engaged in such “pension de-risking” moves include Kimberly-Clark – which entered into deals with Prudential Insurance Company and Massachusetts Mutual Life Insurance Co., with an eye to saving about $2.5 billion through the move – as well as other major corporations such as Motorola, Bristol-Myers Squibb, General Motors, and Verizon.

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Home > News > Newsmakers > CalPERS Urges Exxon Shareowners Vote “Yay” on Climate Change Proxy May 31
Newsmakers

CalPERS Urges Exxon Shareowners Vote “Yay” on Climate Change Proxy May 31

Proposal #12  looks to enhance reporting on impact of oil and gas reserves under 2-degree target and review long-term impacts.

By Chris Butera

Exxon Mobil shareowners are being urged by the California Public Employees’ Retirement System (CalPERS) to vote in favor of a proxy ballot resolution requiring the company to report on climate change related environmental risks and opportunities.

Formally titled Proposal #12, the resolution will be voted on at the international oil and gas company’s Annual General Meeting on May 31.

Under the “2 Degree Scenario,” the proposal would request an assessment of the company’s portfolio, which would not only enhance existing reporting by analyzing oil and gas reserve impacts under the globally agreed 2-degree target, but also review long-term impacts of global climate change policies as well as technological advancements. The assessment also looks to examine the financial risks and resiliency of Exxon Mobil’s portfolio through 2040 and beyond.

“Exxon is a leading voice in the business community supporting the Paris climate change goals to limit global warming to 2 degrees,” said Anne Simpson, CalPERS investment director, sustainability, in a press release. “We applaud their efforts and encourage Exxon directors to engage with shareowners. It’s time for Exxon to provide investors with the risk reporting that backs up their welcome policy position.”

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The meeting will be held at the Morton H. Meyerson Symphony Center in Dallas, Texas, at 9:30 a.m. CT. Supplemental proxy materials may be downloaded here.

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