Arconic transfers $240 million in pension liabilities

Arconic Corp., Pittsburgh, purchased a group annuity contract from an insurance company to transfer about $245 million in U.S. defined benefit plan assets.

The transaction, completed in December, transferred about $240 million in liabilities and represented the retirement benefits of about 7,000 participants in two U.S. defined benefit plans, the company disclosed in a 10-K filing with the SEC on Tuesday.

The name of the insurer was not disclosed.

It was the second pension risk transfer transaction for the company in 2020. In the second quarter, the company purchased a group annuity contract from an undisclosed insurer to transfer about $250 million in U.K. pension plan liabilities.

Arconic Corp. was formed April 1 as a result of the separation of Arconic Inc. into two companies. The other company is Howmet Aerospace Inc.

Separately, the company disclosed in the 10-K filing that in 2021 it will make minimum required contributions of $183 million and $9 million, respectively, to its U.S. and international plans.

As of Dec. 31, global DB plan assets totaled $2.754 billion, while projected benefit obligations totaled $4.081 billion, for a funding ratio of 67.5%.

A year earlier, the original Arconic Inc. had $4.9 billion in global pension plan assets and $7.3 billion in projected benefit obligations, for a funding ratio of 67.1%, according to the previous company's February 10-K filing.

The plans' discount rate as of Dec. 31 was 2.45%. The original Arconic's discount rate was 2.29% a year earlier.

Also as of Dec. 31, the global pension plans' actual allocation was 51.6% fixed income, 20% discretionary and systematic macro hedge funds, 10.5% public equities, 5.4% private equity, 5% real estate, 4% long/short equity hedge funds and 3.5% other.

The 10-K filings did not provide regional information on assets, liabilities, discount rate or asset allocation.

Spokeswoman Tracie Gliozzi could not be immediately reached for further information.