Retiree Benefits, a firm that acquires and manages the defined benefit pension plans of companies that have frozen their pension plans, has started operations, said Paul Palmer, chief executive. The firm, which will guarantee full benefits to participants in the frozen plans it takes over, will invest assets in equities, debt and alternatives to provide a return above what companies could get simply by matching assets to liabilities, Mr. Palmer said. "If the plan that we're managing doesn't make money, than we don't make money," he said.
The new firm is being funded by three private equity firms: Amaranth; Cerberus Capital Management; and Lightyear Capital. Retiree Benefits' partners will also work with consulting firm Hewitt Associates and the Groom Law Group, which specializes in ERISA cases.
Mr. Palmer was president of the enhanced structured products group at the Asset Guaranty/Enhance Financial Services Group, an insurance company.