McKesson Corp., San Francisco, has completed the termination of its U.S. pension plan and has purchased a group annuity contract from an insurance company to transfer its remaining liabilities.
The medical supply company completed the annuity transaction in the third quarter, purchasing the contract for $280 million, which was fully funded by plan assets, according to the company's 10-Q filing Wednesday with the SEC.
McKesson did not disclose the name of the insurance company, which will begin benefit payments to participants Nov. 1.
The contract purchase followed the distribution of lump sums to participants in the second quarter that elected an offer during a lump-sum window. About 1,300 participants elected the lump sum, to whom the company distributed a total of about $49 million in plan assets.
The company's board of directors voted in May 2018 to terminate the plan, which has been frozen to benefit accruals since Dec. 31, 1996.
As of March 31, U.S. plan assets totaled $322 million, while projected benefit obligations totaled $439 million, for a funding ratio of 73.3%, according to the company's most recent 10-K filing.
Spokeswoman Kristin Hunter Chasen could not be immediately reached to provide further information.