Graphic Packaging Holding Co., Atlanta, purchased group annuity contracts from American General Life Insurance Co. and United States Life Insurance Co. to transfer the remaining liabilities from its largest U.S. pension plan.
The annuity purchases from the insurance companies, both subsidiaries of American International Group, transfer about $750 million in liabilities from the plan, according to an 8-K filing Wednesday with the SEC.
The company expects the transaction, affecting about 8,700 participants, to be completed Thursday. The purchase follows the payment in the fourth quarter of lump sums totaling $150 million in liabilities to about 3,600 plan participants that elected them, the filing said.
The purchase completes the termination of the GPI U.S. Consolidated Pension Plan, which the company announced in its most recent 10-K filing in February.
The company said at the time it had frozen the plan on Dec. 31, 2018, for all employees whose benefit accruals had not previously been frozen and had then spun off active participants into a pension plan that had been established in early 2018 as part of the company's 2018 merger with International Paper Co.'s North America consumer packaging business.
Graphic Packaging made a lump-sum offer in 2015 to former employees who were vested in the U.S. defined benefit plan but who had yet to retire and distributed $34.6 million in payments at the time. The U.S. pension plan was frozen to most salaried and non-union employees effective July 1, 2011, and was closed to newly hired union employees in 2015.
As of Dec. 31, 2018, the GPI U.S. Consolidated Pension Plan had $799 million in assets, according to the plan's most recent Form 5500 filing.
As of that same date, overall North American and U.K. pension plan assets totaled $1.187 billion, while projected benefit obligations totaled $1.245 billion, for a funding ratio of 95.3%, down from 98.1%, according to the 10-K filing. Assets and PBO were not broken down by region.
Brian Wilson, vice president, total rewards, could not be immediately reached to provide further information.