NCR Corp., Duluth, Ga., announced Wednesday it has purchased a group annuity contract from Principal Life Insurance Co. to transfer about $160 million in pension liabilities, representing 4,500 retirees receiving benefits from its pension fund.
It is the latest move for the company that has previously completed multiple phases in pension risk transfer, most recently offering from July 2 to Aug. 22 a lump sum to about 20,000 U.S. retirees who began receiving benefits between Jan. 1, 1994, and April 1, 2014.
The group annuity contract with Principal affects U.S. retirees who began receiving benefits before Jan. 1, 1994.
“Since this contract was purchased with existing plan assets, no additional funding of the plan was required for this purchase,” said John Boudreau, NCR’s treasurer, in a news release. “The plan’s funded status is expected to remain materially unchanged as a result of this group annuity contract purchase.”
In November 2013, the company announced an annuity buyout agreement with Pension Insurance Corp. for the defined benefit pension fund for NCR Ltd., its U.K. subsidiary. That pension fund had about 5,400 participants and about $1 billion in pension benefit obligations. Completion of that buyout is scheduled for no later than January 2016.
The pension risk transfer process began in August 2012 with the original lump-sum offer to terminated vested participants who had yet to retire. That offer affected about 23,000 participants in the 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.
Spokesman Kevin Ruane did not return a phone call seeking further information.
