Boise Cascade Co., Boise, Idaho, agreed to purchase another group annuity contract from Prudential Insurance Co. of America to transfer about $122 million in qualified U.S. pension plan liabilities, said Wayne Rancourt, executive vice president, chief financial officer and treasurer.
It is the second pension buyout of the year for the lumber manufacturer and distributor. Boise Cascade on April 25 transferred $152 million in U.S. pension plan liabilities to Prudential, for which Prudential began paying benefits on July 1. Mr. Rancourt said in a telephone interview that a combination of favorable market conditions and the positive experience of working with Prudential contributed to the company deciding to complete a second transaction. While the prior buyout covered retirees and beneficiaries with smaller monthly benefit amounts, the new population of about 420 retirees and beneficiaries has larger monthly benefits.
The new buyout, to which the company signed a commitment letter on Aug. 3, will result in Prudential taking over benefit payments for those retirees and beneficiaries on Oct. 1. Both annuity purchases are cash transactions, Mr. Rancourt said.
The company previously made a lump-sum offer in 2016 to terminated vested employees along with active employees who would elect to retire on or before Nov. 1, 2016, and made total payments of $21 million.
Pension plan assets totaled $422.2 million as of Dec. 31, while projected benefit obligations totaled $483.5 million, for a funding ratio of 87.3%, according to the company's most recent 10-K filing.