Archer Daniels Midland Co., Decatur, Ill., will offer lump-sum payments to 10,000 U.S. retirees, said spokeswoman Jackie Anderson.
The offer is being made to employees who began receiving benefits prior to June 30. Participants will have from Aug. 19 to Oct. 31 to accept the offer, Ms. Anderson said.
The company is offering the lump-sum payments “in an effort to reduce its long-term pension oblighatons,” it said in an 8-K filing.
The company estimates that 20% to 40% of eligible participants will accept the offer, resulting in a pension obligation reduction of $170 million to $340 million. That move could improve the plans’ underfunding by about $13 million to $26 million, according to the 8-K.
ADM expects ongoing pension expenses to increase by $1 million to $3 million on a pre-tax basis in 2015, according to the 8-K.
In September 2012, the company announced a lump-sum offer to between 7,000 and 7,500 vested employees who no longer worked for the company. That offer reduced the company’s global projected benefit obligations by $174 million, according to a 10-K filing.
As of June 30, the company’s U.S. defined benefit plans had $1.6 billion in assets and $2 billion in GAAP liabilities for a funded status of 80%.