< The 2015 Pension 40: The Long Climb

Last year Caitlin Long, head of corporate strategies and pension solutions at Morgan Stanley, said the ball was rolling when it came to pension risk-transfer deals. A year later she says the ball has picked up great velocity. “Most CFOs have now been convinced that pension risk-transfer deals make financial sense,” says Long, 46, who has a JD and a master’s in public policy from Harvard University. “Transactions are economically attractive to plan sponsors.” She points to J.C. Penney Co.’s cashless deal to shift its pension risk by buying a group annuity from Prudential Financial. Penney’s stock rose 7.1 percent on the day of the announcement, 5.6 percent better than the S&P 500 that day. The cashless transaction shows that annuity contracts could be customized for different companies with different pension scenarios, says Long, who has been working on pensions at Morgan Stanley since 2007. Long, who has also advised Bristol-Myers Squibb Co., General Motors Co., Motorola Solutions and Verizon Communications, among others, on risk-transfer deals, points out that the Penney deal was unique. The company had already largely de-risked its pension, which was overfunded, with stable fixed-income instruments. Still, the market loved that the retailer was permanently shifting pension obligations to a third party. “The hibernation strategy is still not one that is looked on by the market as favorably as settlements,” Long says. “Investors want these liabilities paid off; not just neutralized.” She adds that “companies are able to see real data points now that the equity market does reward these moves.” Last year also saw smaller transactions, such as Timken Co.’s purchase of a group annuity (also from Prudential) for about 5,000 retirees.

 
The 2015 Pension 40

1. Bruce Rauner Illinois 2. John & Laura Arnold Laura and John Arnold Foundation Private Markets Investment Outlook Q2 2025: Opportunities Amid Uncertainty Sponsored by Schroders Capital May 1, 2025 3. Chris Christie New Jersey 4. Randi Weingarten AmericanFederation of Teachers 5. Phyllis Borzi U.S. Department of Labor

6. Kevin de León California 7. Alejandro García Padilla Commonwealth ofPuerto Rico 8. Laurence Fink BlackRock 9. Rahm Emanuel Chicago 10. Sean McGarvey North AmericanBuilding Trades Unions

11. John Kline Minnesota 12. J. Mark Iwry U.S. Treasury Department 13. Damon Silvers AFL-CIO 14. Jeffrey Immelt General Electric Co. 15. Joshua Gotbaum Brookings Institution

16. Robin Diamonte United Technologies Corp. 17. Mark Mullet Washington 18. Terry O'Sullivan Laborers' International Union of North America 19. Raymond Dalio Bridgewater Associates 20. Ted Wheeler Oregon

21. Thomas Nyhan Central States Southeast and Southwest Areas Pension Fund 22. Karen Ferguson & Karen Friedman Pensions Rights Center 23. Randy DeFrehn National Coordinating Committee forMultiemployer Plans 24. Robert O'Keef Motorola Solutions 25. Caitlin Long Morgan Stanley

26. Kenneth Feinberg The Law Offices of Kenneth R. Feinberg 27. Orrin Hatch Utah 28. Kathleen Kennedy Townsend Center for Retirement Initiatives, Georgetown University 29. Ian Lanoff Groom Law Group 30. Joshua Rauh Stanford Graduate School of Business

31. Ted Eliopoulos California Public Employees' Retirement System 32. Edward (Ted) Siedle Benchmark Financial Services 33. Teresa Ghilarducci New School for Social Research 34. Denise Nappier Connecticut 35. W. Thomas Reeder Jr. Pension BenefitGuaranty Corp.

36. Hank Kim National Conference on Public Employee Retirement Systems 37. Paul Singer Elliott Management Corp. 38. Bailey Childers National PublicPension Coalition 39. Amy Kessler Prudential Financial 40. Judy Mares U.S. Labor Department