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Pension Risk Transfer

Anglo American to unload 100% of its pension liabilities with annuities from Momentum

The trustee of Anglo American Corp. Pension Fund, Johannesburg, agreed with Anglo American PLC to transfer all of the liabilities of its frozen defined benefit fund to Momentum, an insurance firm.

The trustee of the pension fund, which has been frozen since 2010, proposed buying annuities that will target consumer price inflation increases, guaranteeing payment of future pension benefits for the participants who will retire in 2030 and five former employees who have retained their past service in the AACPF, Anglo American said in a news release.

The world's largest platinum producer cited continued unpredictability of future investment returns and challenges in meeting the pension fund's cash-flow requirements for benefit payments over the next three to four decades as well as lack of experienced administrators and trustees required to manage a DB fund in-house as among the key reasons behind the decision to transfer liabilities to an insurer.

The asset size of the pension fund and its current funding ratio could not be learned.

A spokeswoman declined to provide additional details.