Mondelez International Inc., Chicago, has terminated one of its U.S. pension plans and completed a buy-in transaction that will be converted to a buyout upon completion of the termination.
The snack food company disclosed the purchase of two group annuity contracts from undisclosed insurance companies completed during the third quarter of 2024, according to a 10-K filing from the SEC on Feb. 5.
In October, the company approved the termination of the Mondelez Global LLC Retirement Plan, which was effective Dec. 31, according to the filing.
The agreement with the two insurance companies “features a buy-in of the plan assets with an option to elect a future buy-out conversion. As part of the buy-in, all of the MDLZ Global Plan assets were transferred to the insurance companies in exchange for an annuity contract during the third quarter of 2024 to further reduce the risk of plan asset value volatility,” according to the filing.
Mondelez currently retains the benefit obligations until the buyout conversion is completed, at which time the insurance companies will take on the full responsibility of paying benefits to retirees and beneficiaries, according to the filing.
According to the company’s most recent Form 5500 filing, the Mondelez Global LLC Retirement Plan had $979 million in assets. Also according to the filing, Aon has been serving as plan termination consultant.
The company’s other U.S. pension plan is the Mondelez Global LLC Hourly Retirement Plan, which has not been terminated. That plan remains open for union employees, and was frozen for nonunion employees as of Dec. 31, 2019, according to that plan’s most recent Form 5500 filing.
As of Dec. 31, 2023, the Mondelez Global LLC Hourly Retirement Plan had $296 million in assets, according to the Form 5500 filing.
