Baxter International Inc., Deerfield, Ill., has entered into an agreement with Prudential Insurance Co. of America to purchase a group annuity contract transferring $2.4 billion in U.S. pension plan liabilities, the company disclosed Wednesday in an 8-K filing with the Securities and Exchange Commission.
The contract will transfer the responsibility for the benefits of about 17,200 retirees in the Baxter International Inc. and Subsidiaries Pension Plan.
The annuity contract transfers the liabilities of those retirees and former employees who began receiving benefits before Jan. 1. Former employees vested in the plan but who are not receiving benefits yet will remain in this plan.
Current employees are in a separate U.S. pension plan that was split from the Baxter International Inc. and Subsidiaries Pension Plan on Jan. 1, 2018. Baxter will freeze benefit accruals in that plan as of Dec. 31, 2022.
The premium will be funded by plan assets and no additional contributions to the plan are expected, the filing said.
As of Dec. 31, Baxter's global defined benefit plan assets totaled $4.8 billion, according to the company's most recent 10-K filing.
A Baxter International spokesman could not immediately provide further information.