Shell siphons off $4.9 billion in U.S. pension liabilities to insurer

Shell USA Inc., Houston, purchased a group annuity contract from Prudential Insurance Co. of America to transfer about $4.9 billion in pension plan liabilities.

The transaction will transfer the responsibility of paying benefits to about 21,500 retirees to the Prudential Financial subsidiary effective May 15, according to a Feb. 7 news release from Prudential.

Shell USA is the U.S. subsidiary of U.K.-based Shell PLC. Spokespeople for the oil company could not be immediately reached for further information.

The transaction is the first "jumbo" pension risk transfer transaction in the U.S. in 2024.

"Prudential is honored to help continue meeting the retirement security needs of Shell's retirees," said Alexandra Hyten, head of institutional retirement strategies at Prudential, in the news release. "We are confident that our commitment to flawless execution — from the transaction itself to participant onboarding and service delivery — will serve Shell retirees well, protecting the lifetime income they've worked hard to earn."

As of Dec. 31, 2022, the Shell Pension Plan had $14.5 billion in assets, according to the company's most recent Form 5500 filing.