(updated with correction)
Timken Co., Canton, Ohio, purchased a second group annuity contract from Prudential Insurance Co. of America to pay future pension benefits for about 3,400 U.S. hourly retirees, said Clark Harvey, company spokesman, in an e-mail.
The partial buyout affects U.S. hourly retirees in The Timken Co. Pension Plan who retired from Timken bearing plants in Canton and Columbus, Ohio, and started receiving benefits before Dec. 31, 2014; it will reduce pension liabilities by about $475 million. The premium the company paid was not disclosed.
In January, Timken bought a group annuity from Prudential to pay future benefits for about 5,000 U.S. salaried retirees in the Timken-Latrobe-MPB-Torrington Retirement Plan, which was meant to reduce pension liabilities by about $600 million. That buyout affected U.S. salaried retirees in the plan who retired before April 2014, as well as plan operative retirees who worked in locations other than Canton.
As of Dec. 31, before either buyout, U.S. pension fund assets totaled $1.7 billion, and projected benefit obligations totaled $1.77 billion, for a funding ratio of 96%.