El Paso Energy Corp., which is acquiring Tenneco Energy, a unit of Tenneco Inc., either will merge the pension plans of both companies or start a new plan for the combined companies, a spokeswoman said.
Since El Paso is only acquiring the energy division of Tenneco, with 3,500 employees, only about $775 million of Tenneco's $3.17 billion in pension assets are expected to be transferred.
El Paso has about $450 million in pension assets, according to the Money Market Directory.
One unique aspect of the El Paso/Tenneco deal is a provision for El Paso to assume approximately $450 million in retiree medical liabilities from Tenneco. That amount would represent the biggest portion of Tenneco's accumulated retiree medical liability, which totaled about $512 million, according to the company's 1995 annual report to shareholders.
The El Paso spokeswoman said the liability would be amortized over a 20- to 30-year period.
