Chemtura Corporation has become the latest company to follow thetrend — transferring its pension liabilities to a thirdparty.

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Chemtura reached an agreement with Voya Retirement Insurance andAnnuity Company to provide pension payments to approximately 5,000retirees and beneficiaries currently covered under the ChemturaCorporation Retirement Plan. The transaction, known as a pensionrisk transfer arrangement, will shift the responsibility forChemtura’s pension obligations over to Voya. In exchange for Voyataking on its financial obligation, Chemtura will purchase a groupannuity contract representing approximately $350 million inpremiums to be paid to Voya.

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In the wake of the passage of the Pension Protection Act of 2006and the financial crisis of 2008, plan sponsors have increasinglylooked for ways to derisk their pension commitments — andincreasingly have turned to the marketplace to findcompanies willing to assume pension risks. In fact, last Juneconsulting firm Mercer launched the Mercer Pension Risk Exchange, aimed athelping a growing wave of plan sponsors execute group annuitybuyouts more quickly and to comparison shop for price.

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As the trend grows, the Pension Benefit Guaranty Corporation(PBGC) is looking at the patterns in risk transfer activity,since companies that derisk will no longer be paying premiums toPBGC and that will also affect PBGC’s long-term financialcondition.

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The biggest players in the market include Prudential, whose risktransfer business is in the top slot and oversees $60 billion ofU.S. pension liabilities, and MetLife, which is in second placewith $38 billion in pension liabilities. Voya aims to rise in thestandings though, since, according to the company, it “views thepension risk transfer market as having natural synergies with itsvarious businesses.”

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On May 1, Voya will start making the pension payments toretirees and beneficiaries of Chemtura’s plan. Individuals’ monthlybenefits will remain the same, and Voya said there will be no otherchanges except that the payments will come from Voya instead ofChemtura.

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