To amend the insurance law, in relation to providing protection to certain retirees from pension de-risking transactions
Impact
The act specifically mandates that any pension de-risking transaction must receive approval from the Insurance Commissioner prior to execution. The bill outlines that retirees will not lose protection due to transfers and requires new providers to offer guarantees comparable to those provided by the Pension Benefit Guaranty Corporation (PBGC). Additionally, it obligates providers to disclose vital financial information and empowers retirees with choices, including the ability to opt-out of these transactions with advance notice and alternative compensation options.
Summary
House Bill 1184, also known as the Pension De-Risking Act, is designed to protect retirees whose pension benefits are transitioned from plans that are protected under the Employee Retirement Income Security Act (ERISA) to alternative providers, typically insurance companies. The increasing trend of pension de-risking or 'pension stripping' poses a significant risk to retirees, as their benefits might not retain the protections originally intended by federal law. This bill prohibits these transactions unless certain protections are put in place, ensuring retirees are treated fairly during these changes.
Contention
A central focus of contention within discussions about HB 1184 may revolve around the balance between the need for insurance companies to manage financial risks while ensuring retiree protections are upheld. Some proponents argue that while de-risking can stabilize pension funds, it should not come at the expense of retiree security. Critics of the bill might express concerns about the feasibility of its implementation, the potential burden on insurers, and whether the measures proposed are sufficient to safeguard retirees' interests effectively.