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Pension Funds

Hartford purchasing annuity to offload $1.6 billion in liabilities

Hartford Financial Services Group Inc., Hartford, Conn., on Monday said it will purchase a group annuity contract from Prudential Financial to transfer $1.6 billion of its $5.65 billion in U.S. pension liabilities, effective Friday.

The transfer will move responsibility for current and future pension benefits for 38% of Hartford's U.S. pension plan participants, according to Hartford's 8-K filing with the Securities and Exchange Commission on Monday.

As part of the transfer, Hartford will contribute about $300 million to the pension fund by the end of this year, according to the 8-K.

Hartford's U.S. defined benefit plan had $4.68 billion in assets and as of Dec. 31, with an 82.8% funding ratio, according to Pensions & Investments' data.

The announcement by Hartford was the latest concerning pension buyouts by corporate plans. On June 23, Accenture PLC, Dublin, announced it had purchased group annuity contracts from American International Group and Massachusetts Mutual Life Insurance to settle about $1 billion in U.S. defined benefit plan obligations. And on May 23, Sears Holdings Inc., Hoffman Estates, Ill., transferred about $515 million in U.S. defined benefit plan liabilities in a group annuity purchase from MetLife.