Pension Stripping continues to be a major concern for retirees.
ProtectSeniors.Org is leading a legislative grassroots campaign advocating for the enactment of state legislation to protect retirees who have been moved out of their ERISA protected defined benefit pension plans and into group annuity contracts.
This practice, known as “pension stripping,” takes away all of the uniform protections intended by Congress under ERISA, including financial disclosures, fiduciary standards, uniform protection from creditors & bankruptcy trustees and uniform coverage offered by the federal Pension Benefit Guaranty Corporation.
ProtectSeniors.Org has achieved legislation, currently pending in New York, that would help replace protections to retirees who are negatively impacted by pension stripping. Senate bill S 6150 is sponsored by Senator Avella. Senators Holyman, Savino and Krueger have signed on and the bill is currently before the Insurance Committee. A companion bill was introduced by Assemblyman Abbate, and Assemblymen Abinanti and Steck are on board as well.
For reasons that are not entirely clear, the life insurance industry is opposed to our efforts to bring more transparency and accountability into the pension stripping arena. In our view, retirees and the insurance industry should want the same thing: solid and transparent structures that are viable for the long haul.
The protections we are seeking would keep less desirable layers from participating and help ensure that retiree assets are protected. This should lead to more business for the right companies and keep fly-bynight operators on the sidelines.
Unfortunately, our efforts to work with the insurance lobby are being met with resistance and ProtectSeniors.Org is the only group pushing for reasonably equivalent protections for retirees who get dumped by their own plan sponsors.
It is baffling to see such opposition to legislation that costs little to implement from an industry that touts itself as being able to solve the pension risk challenges of corporate America.
In Connecticut we made great strides educating members of the Judiciary and Insurance Committees about the importance of state law protections for retirees. Representatives from ProtectSeniors.Org attended a public hearing and the proposed bill overwhelmingly made it through the Judiciary and Insurance
Committees by 36-4 and went to the House floor before it “died”
due to a shortened 2014 legislative session. ProtectSeniors.Org plans to work with Representative Robert Megna who chairs the Insurance Committee on a new bill for the next full legislative session opening in January.
Legislative efforts are also underway in New Jersey, Massachusetts and Pennsylvania. Our proposed legislation would go a long way towards helping retirees navigate the complex state law insurance system. As the table below shows, your rights vary dramatically from state to state after
a pension stripping transfer. We need all of you to be committed to wins in these and many more states.