Resources for Retirees,
Plan Sponsors, and Policymakers

Private Equity Retirement Watch

When Private Equity companies like Brookfield or Apollo take over pension benefit payments, what changes for retirees?

Private Equity Ownership

You may not know that the annuity company managing your retirement assets is owned by a multinational private equity giant like Brookfield Corporation or Apollo Global Management.

  • In its first three reporting quarters since being acquired by Brookfield, American National classified its entire bond portfolio as available-for-sale, and purchased more than $3 billion of debt instruments and asset-backed securities originated or structured by non-insurance affiliates of Brookfield. In an August 2023 earnings call, Brookfield Asset Management’s president said the company plans to allocate around 40% of insurance assets to Brookfield’s own private funds. Brookfield Asset Management Insurance Advisor LLC’s March 2023 Form ADV filing acknowledges that related-party transactions mean “Conflicts of interest will arise directly or indirectly.
  • Athene is owned by private equity giant Apollo Global Management. When pension plan assets are transferred to Athene, Apollo decides how to invest substantially all Athene’s net invested assets supporting payments to retirees. Apollo sells some of the safest corporate and government bonds and replaces them with more complex and illiquid investments that promise higher returns. Apollo has also invested billions of Athene’s assets into Apollo’s own financial products. If Apollo’s bets pay off, Apollo will profit from the higher investment returns. And whether those investment bets pay off or not, Apollo also charges Athene investment management fees – collecting more than $500 million in such fees from Athene in 2021 alone.

Complex and Illiquid Investments

The portfolios of American National (owned by Brookfield) and Athene (owned by Apollo) include complex and illiquid investments.

  • Brookfield Asset Management reported in its 2022 supplemental information document, “Our Insurance Solutions business manages policyholder capital and deploys this across liquid credit strategies, direct loans, and private funds.” In Q3 2022, Brookfield Reinsurance reported to investors, “For the nine months ended September 30, 2022, we deployed $16.9 billion into new investments, including $4.1 billion relating to the acquisition of a 100% interest in American National, net of cash acquired, as well as $13.0 billion of redeployment into new investments within our insurance operating subsidiaries investment portfolios, which was primarily funded by the sale of liquid securities as we redeploy into higher-yielding strategies.”
  • As of March 31, 2022, Athene reported that its investment portfolio, managed by Apollo, had fewer corporate and government bonds and more Asset Backed Securities and Collateralized Loan Obligations compared to peer companies. In 2020, Tom Gober, a forensic accountant and certified fraud examiner, spoke to NBC News about Athene’s investment portfolio and said, “The biggest problem with the investment portfolio is it is high risk and illiquid.” (Read more.) The US Treasury Department reported that non-traditional insurance assets including Asset Backed Securities and Collateralized Loan Obligations “may exhibit enhanced sensitivity to downturns in the credit cycle or may be characterized by reduced liquidity.”

Offshore Deals

American National and Athene are both subsidiaries of Bermuda-based insurance holding companies that were established by global private equity asset managers.

  • American National, a Texas-domiciled insurer, is owned by Brookfield Reinsurance, a recently-established Bermuda-domiciled holding company, which itself is majority-owned by Brookfield Corporation, a Canadian alternative asset manager. Brookfield Corporation makes all investment decisions for the insurance holding company in Bermuda, and its regulated subsidiaries in the US, Bermuda and Canada under long-term asset management agreements. In response to UNITE HERE’s public information act request, American National claimed that the Texas Department of Insurance (TDI), rather than a regulator in Canada or Bermuda, is Brookfield Reinsurance’s global groupwide supervisor.
  • Athene reinsures most of its obligations to its Bermuda reinsurance subsidiaries. That results in less transparency for retirees in the US.  By exploiting the differences between accounting rules in the US versus those in Bermuda, insurers can hold less capital in reserve in support of their obligations to retirees and policyholders than would otherwise be required. (Read more here and here.)

No Federal Government Safety Net

In the US, your benefit payments will not be insured or protected by the federal agencies that regulate pension plans.

Benefit payments from American National or Athene are not insured by the Pension Benefit Guaranty Corporation (PBGC), the federal agency that insures corporate pension plans. If American National or Athene were to become insolvent in the future, a state insurance commissioner could seek a court order to activate the patchwork system of State Guaranty Associations, which would then assess other insurance companies to raise money to cover some of the shortfall. But these associations have different rules and different coverage levels in each state. Most state associations only cover a maximum of $250,000 of benefits for annuity contract-holders. You can find information about the coverage level in the state where you reside here and here.

For Workers and Retirees

Find more information about your plan:


In 2021, during bankruptcy proceedings, JCPenney entered an agreement to transfer $2.8 billion of pension obligations for approximately 30,000 plan participants to Athene and to terminate the pension plan. Read Athene’s announcement here: Press release 4/1/21.

In 2018, 2021, and 2022, Lockheed Martin entered three pension transactions with Athene. In total, the agreements transfer $10 billion in pension obligations for over 40,000 Lockheed Martin plan participants to Athene. Read Athene’s announcement here: Press release 6/27/22. Read Lockheed Martin’s announcements here: Press release 8/3/21 and Press release 6/27/22.

In 2021 and 2022, Alcoa entered three pension transactions with Athene. In total, the agreements transfer $2.5 billion in pension obligations for approximately 18,200 plan participants to Athene. Read Alcoa’s announcements here: Press release 11/17/21, Press Release 12/14/21, and Press Release 8/8/22.

On September 13, 2022, Pactiv entered an agreement to transfer approximately $660 million of pension obligations for approximately 10,200 retirees and beneficiaries to Athene. Pactiv stated, “Subject to certain conditions set forth in the Agreement, all Transferred Participants will continue to receive their benefits from the Plan until December 31, 2022, after which time, subject to the terms of the Agreement, the Insurers will assume responsibility for making direct payment of the benefits to the Transferred Participants and for administrative and customer service support regarding such benefits.” Read Pactiv’s disclosure here: SEC Filing 9/13/22.

Have you received notice that your pension benefits are being transferred to Athene? Contact Us.

For Pension Plan Sponsors

When plan sponsors are choosing an annuity provider to assume benefit obligations, they have a fiduciary duty to “take steps calculated to obtain the safest annuity available, unless under the circumstances it would be in the interests of participants and beneficiaries to do otherwise” (Department of Labor Interpretive Bulletin 95-1). Plan sponsors should consider the potential impacts of private equity ownership, its investment strategies, and offshore affiliated reinsurance on the long-term interests of annuity beneficiaries.

Read UNITE HERE’s comment to the Department of Labor calling for a modernization of current guidance for pension plan fiduciaries on pension risk transfer.

Read UNITE HERE’s letter to single-employer defined benefit plan sponsors warning of new private equity-backed PRT player, Brookfield’s American National

Private Equity’s Insurance Innovation Needs a Risk Check: Regulators need to look closer at private equity’s rush to reinsure pension assets in Bermuda, Kris Devasabai, March 2022

“Private equity money is flowing into insurance, bringing with it new ideas and new risks.  . . .  These firms are following a path blazed by Apollo, which has turned Athene, the insurance platform it established in 2009, into a profit engine for its credit business. Apollo’s big idea was to allocate a larger share of fixed income investments to higher-yielding asset-backed securities (ABS), and away from corporate bonds, which account for the bulk of traditional insurers’ assets.”

Read more. See also: Pension buyouts: rock-bottom prices mask unease over risk, and US Treasury urged to investigate private equity insurers: Senate banking committee chair says Athene and other PE-owned firms take more risk, may hold less capital

Why ‘Offshoring’ Annuity Risk is Wrong, Retirement Income Journal, Tom Gober, June 2022

“When a life insurer buys an asset from (invests in) an asset management subsidiary of its own holding company, it’s difficult for outside analysts to evaluate the value or riskiness of the asset. Its price or risk hasn’t been determined in the public marketplace, but by sister firms. In 2021, for instance, Athene Annuity and Life of Iowa, the top seller of fixed indexed annuities, held $10.36 billion in stock and IOUs from affiliated companies—sister companies in the same holding company. In my opinion as a forensic accountant and certified fraud examiner, that amount of affiliated paper should be compared with Athene’s surplus of only $1.28 billion. If just 12% of their reported affiliated paper became un-collectable in an economic downturn, Athene’s surplus—its buffer against insolvency—would vanish.”

Read More.

Annual Report on the Insurance Industry, Federal Insurance Office, U.S. Department of the Treasury, September 2021

“…[Private Equity]-owners may use investment strategies for their owned insurance entities that have heightened credit and liquidity risk profiles as compared to other market participants. As another example, PE-owned insurers tend to hold a more significant proportion of investments in alternative or non-traditional insurance assets that are associated with illiquidity and complexity premiums. Such investments, which provide a higher- yielding alternative to insurer investments in plain-vanilla bonds, are concentrated in obligations from private issuers. They also may include loans to businesses, collateralized loan obligations, asset-backed securities, and residential mortgages, all of which may exhibit enhanced sensitivity to downturns in the credit cycle or may be characterized by reduced liquidity that could diminish the insurer’s ability to meet unexpected cash demands.”

Read the full report.

What Private Equity Does Differently: Evidence from Life Insurance, Divya Kirti and Natasha Sarin, July 2020

“Private-equity-backed insurers are more profitable. But there is no evidence that this is a consequence of general partners’ investment skill. Rather, private equity firms increase the asset risk of their subsidiaries without incurring commensurate capital charges and decrease tax liabilities. Results based on high-frequency event studies and matching techniques support a causal interpretation. Indeed, private equity firms deliver these changes to their subsidiaries within days of taking over. This improves insurers’ performance, but also introduces risks that rating agencies appear to ignore.”

Read the full report.

For Policymakers

Policymakers must strengthen federal and state regulations to protect retirees from new risks emerging from private equity ownership in the insurance industry. Investment strategies and business models are changing rapidly. Athene first entered the pension risk transfer market in 2017 and in a few short years became the market leader in 2020 and 2021, assuming responsibility for billions of dollars of pension obligations to American workers and retirees.

Senators Brown and Warren Raise Concerns about Apollo and Athene’s Pension Buyouts at Banking Committee Hearing, September 2022

At a Senate Banking Committee Hearing held on September 8, 2022, Senators Sherrod Brown and Elizabeth Warren addressed Athene’s recent pension transactions.

Read More

Senator Brown Calls for Study on How Private Equity Companies are Endangering Workers’ Retirements, March 2022

“Investment firms like asset managers and private equity funds often take on much higher risk strategies than traditional insurance companies, and do not face all of the same capital, liquidity, and policyholder protection requirements as well-regulated insurance companies. Consequently, many workers who chose to invest their retirement savings in conservative and long-lived insurance firms now find themselves paying premiums to much riskier firms with less experience in the insurance business. While investment firms might benefit from huge profits in the short term, failure to adequately manage these risks may ultimately cost policyholders their retirement incomes.”

Read More

State Treasurers Call for New Guidance for Pension Plans in Response to Growing Role of Private Equity, September 2021

“When retirement assets are put into riskier, more complex financial instruments outside the governance of ERISA and PBGC, it behooves regulatory agencies – at both the federal and state level – to ask tough questions and provide guidance to protect plan fiduciaries and beneficiaries. We believe that this fast-evolving area of pension transactions requires additional review and regulatory guidance. Accordingly, we urge DOL to issue additional guidance to pension plan fiduciaries.”

Read More

For Insurance Agents

Given the recent focus on private equity-backed life insurers by state and federal regulators, including the U.S. Senate Banking Committee, the National Association of Insurance Commissioners (NAIC), and the U.S. Department of the Treasury, American National agents may wish to familiarize themselves with the changes Brookfield has made to the investments backing the insurance products they sell.

Read UNITE HERE’s letter to American National agents regarding the changes to American National’s investment strategy since the Brookfield takeover.

UNITE HERE encourages agents to contact their state insurance regulators to seek clarification on questions raised by the new strategy. You can contact your state regulator here.


UNITE HERE Alerts American National Insurance Agents to Dramatic Shift in Company’s Investment Strategy Since Acquisition by Brookfield Reinsurance

UNITE HERE Calls on Department of Labor to Update Guidance on Pension Risk Transfer, Highlights Recent Activity of Brookfield Reinsurance as Latest Reason

UNITE HERE Warns Pension Plan Administrators About American National, a New Private Equity-Backed Pension Risk Transfer Market Entrant

Senator Brown to Address Increased Risk-Taking and Offshore Reinsurance in Life Insurance Industry in Senate Banking Committee Hearing

Senate Banking Chair Brown Asks State and Federal Regulators to Study How Private Equity Companies Are Managing Workers’ Retirement Assets

National Association of Insurance Commissioners task force plans investigation of private equity-owned insurers, including issues related to pension transactions

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