Arconic Corp., Pittsburgh, agreed to purchase a group annuity contract from Massachusetts Mutual Life Insurance Co. to transfer about $1 billion in U.S. qualified pension plan liabilities.
The transaction, which is expected to be completed Wednesday, will reduce U.S. pension plan liabilities by about 25%, the company said Tuesday in an 8-K filing with the SEC.
The pension buyout transfers the benefit-paying responsibility of about 8,400 retirees and beneficiaries to MassMutual after July, the filing said. The purchase is being funded directly from plan assets, according to the filing.
It is the third pension risk transfer transaction for the company in the past year. In December, the company purchased a group annuity contract from an undisclosed insurance company to transfer about $245 million in U.S. pension plan assets, and purchased a group annuity contract from an undisclosed insurer to transfer about $250 million in U.K. pension plan liabilities in the second quarter of 2020, prior SEC filings show.
Arconic Corp. was formed April 1, 2020, as a result of the separation of Arconic Inc. into two companies. The other company is Howmet Aerospace Inc.
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%, according to the company's most recent 10-K filing.
Arconic spokeswoman Tracie Gliozzi could not be immediately reached for further information.