Verizon wasted no time in wrapping the transfer of $7.5 billion worth of pension plans to the Prudential Insurance Co., which will turn them into annuities.
Just Friday, a federal judge in Texas ruled that pensioners fighting the sale didn't have a case to stop the carrier's agreement with Prudential. They had argued that their money won't have the same protections in annuities as it did under Verizon's plan – but that fell on deaf ears.
In his decision, U.S. District Court Judge Sidney Fitzwater wrote, “Plaintiffs have not shown that any part of the proposed transaction violates the requirements of [the Verizon Communications pension plan] because the annuity contract will provide for the continued payment of the participants’ pension benefits in the same form and amount that was in effect under the plan immediately before the annuity purchase, with the same rights to future benefits."
The pensioners' lawsuit, filed less than two weeks ago, got a quick hearing. The association representing the retirees hoped to block the transfer of 41,000 pension accounts. One of the lawyers arguing for the group called Verizon's actions "predatory," stripping the pensioners of a voice in the process. Verizon rebutted by saying there was no merit to the suit because Prudential has many years of experience offering group-annuity benefits.