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Alcoa Corp., Pittsburgh, purchased two group annuity contracts from subsidiaries of Athene Holding to transfer approximately $ 1 billion of US pension liabilities.
The aluminum company will complete the transfer to Athene’s two anonymous subsidiaries later this month, according to an 8-K filing with the SEC on Wednesday.
The transaction affects approximately 11,200 members of Alcoa’s US pension plans, and Athene’s subsidiaries will take responsibility for paying the benefits in December, according to the filing.
Alcoa spokesman Jim W. Beck said in an email that the population includes retirees and beneficiaries. It will not provide more information.
The agreement represents the latest in a series of pension risk transfer transactions that Alcoa has entered into in recent years to reduce the risk of its global pension plans.
In October, Alcoa agreed to purchase a group annuity contract to transfer approximately $ 55 million in pension plan assets to an undisclosed insurer.
The deal is expected to transfer responsibility for paying benefits from around 800 retirees and former employees of one of the company’s pension plans to Suriname, the aluminum company revealed in its 10-Q filing with the SEC. .
As of January 1, 2021, Alcoa froze the defined benefit plans of its American and Canadian employees and transferred the 800 employees concerned to defined contribution plans specific to each country. In 2018, Alcoa purchased a group annuity contract from Athene Annuity and Life Co. to transfer approximately $ 290 million of U.S. pension liabilities.
As of Dec. 31, worldwide Alcoa pension plan assets stood at $ 5.356 billion, while expected benefit obligations totaled $ 6.904 billion, for a funding ratio of 77.6%, according to its latest 10-K filing with the SEC.
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