GE Pension Threats Show Peril of Transfers to Insurers, Spinoffs

The former General Electric Co. and its spinoffs are reckoning with legal threats from participants across pensions the companies sponsor, in a preview of dangers other employers stand to encounter as they restructure or de-risk, offloading benefit obligations to subsidiaries or insurers.

Pension risk transfers to annuity providers present different concerns for participants than the shifting of pension responsibilities to a spinoff, but both are possibilities, particularly when a company sponsoring a pension is splintering or reorganizing to stave off financial troubles, as GE did in April.

Both qualified benefit plans under the Employee Retirement Income Security Act and non-qualified ...