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Verizon Sued over $5.9 Billion Pension Risk Transfer Deal with Prudential

Ex-employees are suing Verizon, as well as State Street Global Advisors, which served as the “independent fiduciary” in putting together the deal to manage the pensions of 56,000 retirees.

By Lynn Cavanaugh | January 08, 2025 at 06:55 PM
Verizon headquarters

Verizon was hit with a class-action lawsuit last week by three ex-employees who say the company improperly shifted pension benefit responsibilities to an insurance company, in the latest pension risk transfer lawsuit challenging the efficacy of insurance companies managing pension funds. However, insurance company Prudential, which is managing the pensions, is not named as a defendant in the Verizon lawsuit. Plaintiffs are suing Verizon and State Street Global Advisors, which served as “the independent fiduciary” in putting the deal together, according to the suit.

“State Street directly profited from the annuitization transactions through its common stock holdings in Verizon, Prudential Financial, … and RGA,” the lawsuit states. “State Street’s own financial interests were improperly served … by helping Verizon obtain the cheapest available annuity provider, as opposed to the ‘safest available’ annuity provider as required by ERISA.”

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