ATI Inc., Dallas, has entered into an agreement to purchase group annuity contracts with two Athene Holdings subsidiaries to transfer the vast majority of its remaining U.S. pension plan liabilities.
The aerospace and defense materials company disclosed the agreement in an Oct. 18 news release.
The purchase of contracts from Athene Annuity and Life Company and Athene Annuity & Life Assurance Company of New York will transfer about 85% of its U.S. qualified pension plan liabilities, which represents about 8,200 participants, according to the news release. The Athene subsidiaries will take on the responsibility of paying benefits effective Jan. 1, said an ATI spokeswoman.
As of Dec. 31, the company's combined U.S. and U.K. pension plan assets totaled $1.6 billion, while projected benefit obligations totaled $1.82 billion, for a funding ratio of 87.9%, according to its latest 10-K filing with the SEC.
The Oct. 18 news release said U.S. pension PBO totaled $1.77 billion as of Dec. 31, but did not provide an asset size. The news release also said the company has contributed $272 million in cash to the U.S. plans in 2023, which included a single $222 million contribution in September.
ATI, formerly known as Allegheny Technologies Inc. until June 2022, has previously completed seven other buyout transactions since 2016. The most recent disclosed buyout was completed in 2021, when the company purchased a group annuity contract from an undisclosed insurer to transfer about $70 million in U.S. pension plan liabilities.
"With this action, ATI meets all of its pension obligations, and everyone benefits," said Robert S. Wetherbee, CEO and chairman of the board, in the news release. "Our retirees will gain the security of having a large, financially strong insurer with established expertise provide their pension benefits. Our business meets its commitments to all its pension plan participants, through both the annuity purchase and our decision to fully fund our remaining qualified pension obligations. And our shareholders gain confidence knowing these derisking actions will result in lower, more predictable pension expense in the future."
