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Pension Funds

Owens-Illinois uses lump sums, annuities to settle pension liabilities in 2017

Owens-Illinois is one of the world’s leading glass bottle makers.

Owens-Illinois Inc., Perrysburg, Ohio, disclosed in its 10-K filing with the SEC on Wednesday that it had settled U.S., Canada and U.K. pension liabilities in 2017 through a combination of lump-sum payments and group annuity purchases from insurance companies.

Owens-Illinois said in the filing with the Securities and Exchange Commission that it had purchased group annuity contracts with "several insurers" to transfer U.S. and Canadian pension liabilities totaling about $369 million and $123 million, respectively, and also paid lump sums to U.S., Canadian and U.K. participants during the year. Owens-Illinois did not specify the amounts of the lump sums, and did not disclose the nature of the populations affected by the annuity purchases and lump-sum payments.

They are the latest derisking moves for the company, which disclosed in December 2016 that it had purchased a group annuity contract from Prudential Insurance Co. of America to transfer about $200 million in pension liabilities, affecting about 7,500 of the company's U.S. retirees and their beneficiaries in the Owens-Illinois Hourly Retirement Plan. The company also has a plan for salaried employees, which was frozen to benefit accruals on Jan. 1, 2016.

As of Dec. 31, according to the 10-K filing, U.S. pension plan assets totaled $1.394 billion, while projected benefit obligations totaled $1.65 billion, for a funding ratio of 84.5%. Non-U.S. plan assets as of that same date totaled $975 million, while projected benefit obligations totaled $1.148 billion, for a funding ratio of 84.9%.

The asset allocation of the U.S. pension plans as of Dec. 31 was 65% equities, 28% fixed income, and 7% real estate and other securities. The non-U.S. plan asset allocation as of Dec. 31 was 54% fixed income, 24% real estate and other, and 22% equities.

Spokeswoman Kristin Kelley could not be immediately reached to provide further information.