US clean energy firm Public Service Enterprise Group has completed a $1bn pension ‘lift out’ with the Prudential Insurance Company of America (Prudential Financial).
The New York state-based renewables outfit made the deal public in its second quarter results when it stated that the pension benefits of 2,000 retirees from its PSEG Power & Other subsidiary would be insured as a result of the transaction.
A ‘lift-out’ refers to the partial insurance of a scheme rather than a complete buy-in or plan termination.
According to the press release, Prudential Financial will take over all pension payments by the end of January 2023.
The utility said the ‘lift-out’ would see the firm take an accounting charge of up to $260m in its third quarter earnings due to the immediate recognition of an unamortised net actuarial loss associated with offloading a portion of the scheme.
Prudential Financial has been active in the pension risk transfer market across both sides of the Atlantic in recent months.
In May the Fortune 500 firm signed a $2.1bn longevity swap – in partnership with Zurich UK – for UK lender Nationwide’s pension fund.