Graphic Packaging Holding Co., Atlanta, is terminating its largest U.S. pension plan, which represents about $800 million in liabilities, the company disclosed in its 10-K filing with the SEC on Wednesday.
In the filing, the company said it had frozen the plan on Dec. 31 for all employees whose benefit accruals had not previously been frozen and had then spun off active participants into a pension plan that had been established in early 2018 as part of the company's 2018 merger with International Paper Co.'s North America consumer packaging business.
For the remaining participants, the company plans to offer a lump-sum benefit option to "certain plan participants" prior to purchasing a group annuity contract from an insurance company sometime in 2019.
"The expected benefit obligation associated with the termination is approximately $800 million," the filing said.
Graphic Packaging previously made a lump-sum offer in 2015 to former employees who were vested in the U.S. defined benefit plan but who had yet to retire and distributed $34.6 million in payments at the time. The U.S. pension plan was frozen to most salaried and non-union employees effective July 1, 2011, and was closed to newly hired union employees in 2015.
As of Dec. 31, North American and U.K. pension plan assets totaled $1.187 billion, while projected benefit obligations totaled $1.245 billion, for a funding ratio of 95.3%, down from 98.1%, according to the 10-K filing. Assets and PBO were not broken down by region.
Graphic Packaging officials could not be immediately reached to provide further information.