Prudential to oversee $221m in retirement benefits for Sound Retirement Trust

The Prudential Insurance Company of America, a provider of insurance and financial services, has been selected for an industry-first pension risk transfer (PRT) involving a multi-employer plan.

They will now oversee the retirement benefits for the Sound Retirement Trust, a Seattle-based joint labour-management board of trustees that provides retirement benefits to grocery workers of participating employers.

The transaction will cover approximately $221 million in pension liabilities for the Sound Retirement Trust, improving retirement security for about 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,” commented 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.”

Multi-employer pension plans, such as the one overseen by the Sound Retirement Trust, are retirement programmes jointly supported by labor unions and contributing employers.

Often referred to as Taft Hartley plans, these arrangements were established by the Taft Hartley Act of 1947. This legislation permits employers in the same industry—such as construction, transportation, or, in this instance, retail food—to contribute to a shared retirement plan for union members based on a collective bargaining agreement.

Michael Clark, Chief Commercial Officer, Agilis, added: “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.

For the participants that remain in the multi-employer plan, they benefit from the improved net cash flow and reduced funded status risk.”

These plans allow union workers to switch jobs with minimal disruption to their retirement benefits, as long as their new employer participates in the same plan.

Faye Guenther, Union Trustee and President of UFCW Local 3000, said: “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.

“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.”

Under the terms of this agreement, The Prudential Insurance Company of America, a subsidiary of Prudential Financial, Inc., will take over the responsibility of paying retirement benefits to the retirees and beneficiaries of the Sound Retirement Trust starting September 1, 2024.

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