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Risk Management

Graphic Packaging Holding outlines plans for lump-sum offers, annuity purchase

Graphic Packaging Holding Co., Atlanta, disclosed in its 10-K filing on Wednesday that it plans to undertake pension risk transfer transactions.

The company disclosed it made an additional contribution of $75 million to its U.S. defined benefit plan, which is closed to all employees and frozen for most salaried and non-union employees, in the fourth quarter of 2017. The contribution "will allow the company to begin the process of settling (pension) liabilities through lump-sum payments and the purchase of annuities," the filing said.

The company also made an additional contribution to its U.K. defined benefit plan of $6.8 million in the fourth quarter and said it "will continue derisking that plan," but did not provide specifics.

Graphic Packaging previously made a lump-sum offer in 2015 to former employees who were vested in the U.S. DB plan but who had yet to retire and distributed $34.6 million in payments at the time. The U.S. plan was frozen to most salaried and non-union employees effective July 1, 2011, and was closed to newly hired union employees in 2015.

As of Dec. 31, global DB plan assets totaled $1.34 billion and projected benefit obligations totaled $1.37 billion, for a funding ratio of 97.8%. U.S. pension plan assets were not broken out.

Alex Ovshey, vice president of investor relations, could not immediately provide further information.