Kemper cuts deep into its pension plan liabilities

Kemper Corp., Chicago, completed pension risk transfer transactions in the fourth quarter that cut its liabilities by nearly half.

The company purchased a group annuity contract from an insurance company during the fourth quarter to transfer about $205 million in pension plan liabilities. Kemper did not disclose the name of the insurer in its 8-K filing with the SEC Monday.

The company also made lump sum payments totaling $117 million to plan participants. The 8-K filing did not disclose the nature of the population that received the payments.

Kemper "took advantage of an attractive pension environment to reduce non-value-added risk and further strengthen an already strong balance sheet," according to a presentation included with the filing.

Kemper's pension plan has been frozen since June 30, 2016, according to the company's most recent 10-K filing with the SEC. As of Dec. 31, 2019, the plan had about 8,650 participants and beneficiaries, which included 1,250 active employees.

Also as of that date, the plan had $525 million in assets and $665 million in projected benefit obligations, for a funding ratio of 78.9%.

Kemper spokeswoman Barbara Ciesmier did not reply to requests for further information.