Peabody Investments terminating pension plan

Peabody Investments Corp., St. Louis, is terminating its pension plan.

The company's board of directors approved the termination of the Peabody Investments Corp. Retirement Plan in May and the process of termination began July 31, according to a 10-Q filing Thursday from parent company Peabody Energy Corp.

Once the company receives all regulatory approvals, the completion of the termination is expected in the first half of 2023 when lump sums will be offered to participants, followed by a group annuity purchase from an insurance company to settle remaining liabilities.

Peabody Investments previously disclosed in March its purchase of a group annuity contract from Prudential Insurance Co. of America to cover the plan's liabilities. Peabody Investments currently retains the benefit-paying responsibilities for the population covered by the contract, but it 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.

As of Dec. 31, the Peabody Investments Corp. Retirement Plan had $612 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 Peabody Energy's most recent 10-K filing with the SEC in February.

Also according to that 10-K filing, Peabody Energy 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.