International Paper Co., Memphis, Tenn., made about $1.2 billion in lump-sum payments to former employees to whom the company made an offer in the spring, said Thomas J. Ryan, company spokesman, in an e-mail.
The company offered the lump-sum window, which closed on April 29, to about 47,000 former employees who were vested participants of the Retirement Plan of International Paper Co. but had yet to retire. The former employees represented about $3 billion in pension liabilities.
Mr. Ryan said about 25,000 of those former employees elected to receive the lump sum.
The company announced in its 10-Q filing with the Securities and Exchange Commission on Wednesday that the company took on a “a pre-tax charge of $439 million ($270 million after taxes) for a settlement accounting charge associated with term-vested lump-sum pension payments.”
As of Dec. 31, the company's U.S. defined benefit plan assets totaled $10.92 billion, with projected benefit obligations of $14.44 billion, for a funding ratio of 75.6%, according to the company's most recent 10-K filing.
The company has contributed about $750 million to the U.S. plans in 2016 thus far. Of that total, $250 million was contributed in the first six months of the year, with an additional $500 million coming in August after the issuance of $2.3 billion in bonds.