Federal Guarantees Should Continue After Pension Risk Transfers Argues New White Paper by Ivins, Phillips & Barker Partners Kevin O'Brien and Spencer Walters

WASHINGTON, Nov. 6, 2025 /PRNewswire/ -- Nationally recognized ERISA attorneys Kevin O'Brien and Spencer Walters of Ivins, Phillips & Barker (IPB) have released a new white paper, "The Forgotten Promise: Why PBGC Retirement Benefit Guarantees Should Continue After Pension Risk Transfer Transactions."  Their paper challenges the Pension Benefit Guaranty Corporation's decades-old position that retirees lose federal protection once pensions are converted to annuities – a stance the authors argue contradicts the statute, legislative history, and the PBGC's own original interpretation.

The paper traces how, in 1981, the PBGC took the position in the regulations and in a clearly worded Federal Register preamble statement that PBGC insurance protects against benefit losses in the event of an insurance company failure. O'Brien and Walters argue that the PBGC's later reversal of this position is not supported by the statute and is susceptible to challenge after last year's Supreme Court decision in Loper Bright upending the Chevron deference standard.

"The PBGC's current position isn't just inconsistent with the law, it undermines the reason for the creation of the PBGC," said lead author Kevin O'Brien. "Congress created the PBGC to guarantee benefits, not to walk away from them. Restoring that guarantee would strengthen retirement security without jeopardizing the PBGC's solvency."

The paper was prompted by O'Brien's review of a forthcoming special report by Steve Keating, Managing Director at BCG Pension Risk Consultants | BCG Penbridge, about the evolution of pension risk transfer in the United States over the past 50 years, which is scheduled for release on November 12th. 

"This issue traces back to a 1981 PBGC statement in the Federal Register — 'In the unlikely event that an insurance company should fail… the PBGC would provide the necessary benefits' — just one of more than 70 entries in our upcoming report," said Keating. "The White Paper's interpretation raises important questions about how PBGC protections are understood today. If this analysis holds, it could influence current litigation and reshape how fiduciaries evaluate annuity transactions — potentially altering the future structure of the PRT market."

The full white paper and supporting materials are available at www.ipbtax.com/PRT-PBGC-Guarantees.

Kevin O'Brien, Partner at Ivins, Phillips & Barker, has concentrated his practice in employee benefits and compensation for over 30 years. He is widely known as a leader in a variety of subjects, including innovative defined benefit plan design, flexible benefits, ERISA fiduciary matters and executive compensation. Before joining IPB, Kevin worked in the Pension and Welfare Benefits Administration at the Labor Department soon after ERISA was enacted.

Spencer Walters, Partner at Ivins, Phillips & Barker, practices all aspects of employee benefits and executive compensation law, including the development and maintenance of qualified and nonqualified plans; plan compliance with the Code, ERISA, and Affordable Care Act; the treatment of employee benefits plans in connection with corporate mergers and acquisitions; and executive employment agreements and compensation arrangements, including Code section 409A.

About Ivins, Phillips & Barker:
Ivins, Phillips & Barker (www.ipbtax.com) is exclusively engaged in the practice of federal tax, benefits and compensation, and estate and gift tax law. Founded by two of the original judges on the United States Tax Court in 1935, our decades of focus on the intricacies of the Internal Revenue Code and Department of Labor regulations have led numerous Fortune 500 companies, as well as smaller companies, tax-exempt organizations, and high net worth individuals to rely on us for answers to their most complicated and sophisticated tax planning problems as well as for complex tax litigation.

Contact:
Amanda Ferrari
[email protected]
440-465-6162

SOURCE Ivins, Phillips & Barker