Heinz-Kraft Pension De-Risking and Pension Advice for Its Employees

Published December 13, 2017
Heinz-Kraft is offering its workers plan consolidations, lump-sum offers to current non-retirees, or an annuity purchase in order to de-risk their pension liability. There are other alternatives to these options, however, that better suit those looking to secure guaranteed retirement income.
  • De-risking is a way for companies to alleviate their employee pension liability
  • Heinz-Kraft is offering employees alternative retirement options as part of their de-risking strategy
  • Heinz-Kraft employees can purchase a Personal Pension or income annuity as an alternative option to secure retirement income

Heinz-Kraft Pension De-Risking Issue

The merger between H.G. Heinz Co. and Kraft Foods Group resulted in the union of a $13 billion plus behemoth in defined benefit and defined contribution retirement assets. Kraft Heinz contributed $311 million to its U.S. pension plans in 2016, which included contributions related to the settlement of a non-qualified pension plan that was terminated effective Dec. 31, 2015.  Per its 2016 10K, the Company was to contribute $150 million to its U.S. pension plans in 2017.  Companies often make massive fund injections to meet the necessary requirements to begin de-risking the pension plan. De-risking is a way for a company to reduce the impact of pension obligations and funding requirements on its financial statements.

Kraft’s de-risking of pensions started prior to the merger. Salaried and non-union hourly Kraft employees hired before 2009 were eligible for its pension plan, but in Kraft’s 2014 filing, the company said it will freeze its pension plans at the end of 2019. Its unfunded liabilities had increased from $271 million at year-end 2013 to $1.1 billion at year-end 2014.

For its part, Heinz prior to this merger was bought by Berkshire Hathaway and 3G Capital Management in 2013. After this sale, Heinz had announced several pension de-risking schemes, including plan consolidations, lump-sum offers to the non-retirees in its defined benefit plans, and an annuity purchase.

Heinz-Kraft Pension De-risking and Employees Call to Action

What all this means is that Heinz-Kraft employees need to act quickly whether or not they have been impacted as their company continues its pension de-risking. It’s clear that companies increasingly want to focus on their core business and don’t want to manage their pension plans.  Private Pension Plan options are becoming increasingly popular, and we at Blueprint Income would suggest 2 alternatives for Heinz Kraft employees to mitigate the pension gap resulting from all the de-risking and to increase their guaranteed lifetime income.

Heinz-Kraft Pension De-risking Alternative 1 – The Personal Pension

We believe this to be the best option for all Heinz-Kraft employees. The Personal Pension is the next best thing to an employer pension and is a way to generate pension-like income in retirement without your employer. Instead of being provided by employers, it’s backed by insurers, like an annuity. But, unlike the average annuity, you can purchase it in small amounts over time. Blueprint Income offers a Personal Pension account with the lowest minimum, $5,000. After opening an account, you can make subsequent contributions of as little as $100, each of which will increase your pension check.

Here you can see what contributing to a Personal Pension will guarantee you in annuity retirement income. After just a few years in retirement, you’ll have recouped your initial investment, and the rest will be profit. 

From there, you can fill out the information to have one of our specialists follow up with you, or continue with the enrollment process on your own. To do that, start with the Personal Pension Builder, where you’ll be able to set a goal for how to grow your pension over time. Note that all future contributions are optional, but it’s always great to have a goal.

Heinz-Kraft Pension De-risking Alternative 2 – Buy an Income Annuity

An alternative is to buy an income annuity.  Income annuities generally come in two types — longevity annuities and immediate annuities. Immediate annuities (as the name implies) have income starting within the next 12 months, whereas longevity annuities start income (at a predetermined level two year or more into the future). Both of these types of income annuities provide the financial security that you get from a guaranteed lifetime income stream that comes each month for as long as you’re alive. They’re ways to increase your pension check. 

At Blueprint Income, we offer annuities from more than 15 top rated insurance companies. Click below to get real-time personalized quotes, where you can compare options offered from different insurers on an apples-to-apples basis.

Heinz-Kraft Pension De-risking

From there, you’ll get access to our annuity guides, team of specialists to help you analyze your retirement finances and walk you through the application process.

So, in short, if you’re looking to mitigate Heinz-Kraft’s pension de-risking and get more guaranteed lifetime income, you have two options for how to get it. (Please note that these options are available to all Americans, not just Heinz-Kraft employees.)

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Lauren Minches

Lauren Minches

Financial Planning Professional

Lauren is an actuary by training with expertise in retirement, finance, and risk. She writes about annuities to make them easier to understand and evaluate. Her goal is to help people create retirements with more time for living and less time thinking about money.