WestRock Co., Norcross, Ga., is purchasing a group annuity contract from Prudential Insurance Co. of America to transfer about $2.5 billion of U.S. defined benefit plan liabilities, said Frank Varano, senior manager — pension and investments at WestRock.
The deal is expected to close in late September, subject to closing conditions, and involves about 35,000 U.S. retirees. Mr. Varano said the company is not making the nature of the specific population public.
WestRock Co. was created on July 1, 2015, from the merger of Rock-Tenn Co., Norcross, Ga., and MeadWestvaco Corp., Richmond, Va.
The companies had previously made lump-sum offers to respective former employees who had yet to retire, and the companies' defined benefit plans were merged into the WestRock Co. Consolidated Pension Plan the day after the new company was created, the company's most recent 10-K filing said. The plan was frozen to benefit accruals on Dec. 31.
As of Sept. 30, 2015, the company's U.S. defined benefit plan assets totaled $6.482 billion, while projected benefit obligations totaled $6.122 billion, for a funding ratio of 105.9%.