Bill > H776

This bill, known as the Pension De-Risking Act, aims to protect retirees whose pension benefits are transferred from plans governed by the Employee Retirement Income Security Act (ERISA) to new providers regulated by state law, such as insurance companies. The act mandates that these "pension de-risking" or "pension stripping" transactions, where companies move pension obligations to insurers, must be approved by the state Commissioner. To ensure retiree security, these transactions must include supplemental protections like third-party guarantees or reinsurance to cover potential shortfalls if the annuity provider becomes insolvent, mirroring the coverage provided by the Pension Benefit Guaranty Corporation (PBGC), a federal agency that insures pensions. Furthermore, the bill requires insurance companies to provide retirees with comprehensive disclosures before and annually after the transfer, detailing the loss of ERISA protections, the scope of state guaranty coverage, potential creditor claims, tax implications, contract costs, and solvency analyses. Retirees will also have a 90-day notice period and the option to opt out of these transactions, potentially receiving a lump-sum payout. The bill also establishes that assets held for retiree benefits must be in trust, annuity payments are protected from creditors and bankruptcy trustees, and retirees have the right to request lump-sum payouts under certain conditions. Finally, any subsequent transfer of these group annuity contracts will require the Commissioner's approval, contingent on a solvency analysis.