Alcoa purchases annuity to transfer $55 million in pension plan assets

Alcoa Corp., Pittsburgh, agreed to purchase a group annuity contract to transfer $55 million in pension plan assets to an insurance company.

The agreement, signed this month, transfers the benefit-paying responsibility for about 800 retirees and former employees in one of the company's pension plans in Suriname, the aluminum company disclosed in its 10-Q filing with the SEC.

The transfer also moves $55 million in pension plan liabilities to the undisclosed insurer, the filing said.

The filing does not disclose whether the Suriname-based pension plan is now terminated. In 2017, Alcoa permanently closed the Suralco aluminum refinery in the South American country.

It is the latest in a series of pension risk transfer transactions Alcoa has completed in recent years to derisk its global pension plans.

Starting on Jan. 1, 2021, Alcoa froze the defined benefit plans for its U.S. and Canadian salaried employees, and moved the 800 affected employees to country-specific defined contribution plans. In 2018, Alcoa had purchased a group annuity contract from Athene Annuity and Life Co. to transfer about $290 million in U.S. pension plan liabilities.

As of Dec. 31, Alcoa's global pension plan assets totaled $5.356 billion, while projected benefit obligations totaled $6.904 billion, for a funding ratio of 77.6%, according to its most recent 10-K filing with the SEC.

Alcoa spokesman Jim Beck could not be immediately reached for further information.