Prudential Financial - General Motors Pension Risk Transfer: Back to the Future?

Harvard Business School Case Collection

The 2012 Prudential Financial and General Motors $25.1B pension risk transfer transaction was the largest and most complex of its kind by an order of magnitude in the U.S. market and globally. A flawless execution on behalf of 110,000 former plan participants of the legacy GM Retirement Program for Salaried Employees required exceptional teamwork, sophisticated expertise in longevity risk, ALM, investments, pensions, a scalable plan administration infrastructure and relentless dedication to servicing excellence. 

This case captures the complex set of considerations leading to this transaction as well as implications of PRT for the pension plan sponsors, asset managers and insurers in light of rising longevity risk, interest rate trends, the regulatory landscape and corporate appetite for holding pension funding risk.

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