Peabody Investments Corp., St. Louis, purchased a group annuity contract from Prudential Insurance Co. of America for $500 million to cover U.S. pension plan liabilities.
The pension buy-in transaction, which is expected to be completed Wednesday, was disclosed in an 8-K filing Monday from parent company Peabody Energy Corp.
Peabody Investments Corp. will retain the benefit-paying responsibilities for the population covered by the contract, but will be reimbursed for all future benefit payments covered by the contract. Pension buy-in transactions are common in the U.K. but are a rarity in the U.S.
The 8-K filing did not disclose the nature of the population of participants in the Peabody Investments Corp. Retirement Plan covered by the contract.
As of Dec. 31, 2020, the Peabody Investments Corp. Retirement Plan had $672 million in assets, according to the company's most recent Form 5500 filing.
The plan was frozen on May 31, 2008, and the company completed a voluntary lump-sum program in December 2020 for active salaried employees and former salaried employees who had yet to retire that settled $52 million in projected benefit obligations, according to the company's most recent 10-K filing with the SEC in February.
Also according to that 10-K filing, the company reported $772 million in total pension plan assets and $752 million in projected benefit obligations, for a funding ratio of 102.7%.
Officials at Peabody Energy could not be immediately reached for further information.
