Alcoa buys annuities for $555 million of Canadian pension liabilities

Alcoa Corp., Pittsburgh, purchased group annuity contracts from three insurance companies to transfer a total of about $555 million in Canadian defined benefit plan obligations, the company disclosed in an 8-K filing with the SEC on Tuesday.

The insurance companies are Sun Life Financial, Desjardins Financial Security Life Assurance Co. and Industrial Alliance Insurance and Financial Services Inc. How the $555 million will be split was not immediately released. The insurance companies will begin making benefit payments to a total of about 2,100 retirees and their beneficiaries in July.

Alcoa will contribute about $95 million in April to its Canadian pension plans to "facilitate the annuity transaction and maintain the funding level of the remaining plan obligations," said the filing with the Securities and Exchange Commission.

As of Dec. 31, Alcoa's defined benefit plan assets totaled $5.322 billion, while projected benefit obligations totaled $7.639 billion, for a funding ratio of 69.7%. A split between U.S. and Canadian plans was not available.

Alcoa spokesman Jim Beck said the company would provide only information already in the filing.