Alcoa Corp., Pittsburgh, purchased two group annuity contracts from Athene Holding subsidiaries to transfer about $1 billion in U.S. pension plan liabilities.
The aluminum company will complete the transfer to the two unnamed Athene subsidiaries later this month, according to an 8-K filing with the SEC Wednesday.
The transaction affects about 11,200 participants in Alcoa's U.S. pension plans, and the Athene subsidiaries will take on the responsibility of paying benefits in December, the filing said.
Alcoa spokesman Jim W. Beck said in an email the population includes retirees and beneficiaries. He would not provide further information.
The deal represents the latest in a series of pension risk transfer transactions Alcoa has completed in recent years to derisk its global pension plans.
In October, Alcoa agreed to purchase a group annuity contract to transfer about $55 million in pension plan assets to an undisclosed insurer.
That agreement is set to transfer 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.
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.