NCR Corp. announced on Tuesday it will make a voluntary lump-sum offer to about 20,000 U.S. retirees.
It is the second lump-sum offer for former U.S. employees for the Duluth, Ga.-based company in the past two years. The new offer is being made to employees who began receiving benefits between Jan. 1, 1994, and April 1, 2014. The offer window will be July 2 until Aug. 22.
“This offer is part of our pension transformation and is consistent with our overall derisking strategy,” said John Boudreau, treasurer, in a news release. “There is no additional funding of the plan required for this transaction as all distributions will be made out of existing plan assets. The plan’s funded status is expected to remain materially unchanged as a result of this offer.”
The new lump sum offer is part of the third phase of the company’s multiyear pension plan derisking strategy, said spokesman Kevin Ruane.
In August 2012, as part of the second phase, the company announced a voluntary lump-sum offer to about 23,000 former employees who were vested in the company’s frozen U.S. defined benefit plan but had yet to receive benefits. The company said that offer had reduced its liabilities by about $240 million.
Another third phase move in November 2013 was an annuity buyout agreement with Pension Insurance Corp. for the defined benefit pension fund for NCR Ltd., its U.K. subsidiary. The company has not mentioned whether it plans a similar buyout for the U.S. plan.
As of Dec. 31, the U.S. defined benefit plan, which was frozen at the end of 2006, had a fair value of plan assets of $2.683 billion and projected benefit obligations of $2.931 billion, for a funding ratio of 91.5%. The company contributed $187 million to the plan in 2013.
Mr. Ruane could not provide further information by press time.