Sherwin Williams to settle much of its overfunded pension plan

Sherwin Williams Co., Cleveland, plans to settle the majority of its overfunded U.S. defined benefit plan liabilities in 2019, the company disclosed in an 8-K filing with the SEC on Thursday.

In the filing, the retailer said it had distributed lump sums in the fourth quarter to DB plan participants who had accepted the company's offer. Sherwin Williams did not disclose the amount of the lump sums, the number of participants who took the offer or the nature of the participants. In the vast majority of similar cases, however, the population traditionally consists of former employees who have vested in the plan and who have yet to retire.

Sherwin Williams also disclosed it plans to settle "the majority" of its overfunded U.S. DB plan liabilities through either lump-sum payments or a group annuity purchase from an insurance company in early 2019.

Precisely how much in assets the company plans to settle was not disclosed. The filing did say that "after the annuity purchase is completed, the company will use the remaining surplus cash for funding future company contributions to a replacement defined contribution" plan.

At the end of 2017, the company's three U.S. defined benefit plans — two legacy plans and one from its 2017 acquisition of The Valspar Corp. — had more than $200 million in assets over liabilities. As of Dec. 31, 2017, U.S. defined benefit plan assets totaled $1.19 billion, while projected benefit obligations totaled $916.2 million, for a funding ratio of 129.8%, according to the company's most recent 10-K filing.

Sherwin Williams officials could not be immediately reached to provide further information.