Unisys Corp., Blue Bell, Pa., entered into an agreement to purchase a group annuity contract from Massachusetts Mutual Life Insurance Co. to transfer about $280 million in U.S. pension plan assets.
The contract will transfer the responsibility of paying benefits to about 11,600 retirees and beneficiaries who receive monthly payments below certain thresholds, according to a news release Monday. The news release did not disclose the amounts of the thresholds.
It is the second pension risk transfer transaction for the company in the past two months. Unisys announced in October its intention to transfer a total of $1 billion in assets in various transactions for its global pension plans by the end of the first quarter.
In December, the company announced it had made lump-sum payments totaling $276 million to former U.S. employees who accepted an offer from the company.
Unisys had announced in February 2020 its plans to contribute more than $600 million to its U.S. pension plans in 2020 to improve the funding ratios of the plans to enable future PRT transactions, said Mike Thomson, chief financial officer, at the time.
"We're going to aggressively approach that market, and our objective is to remove this liability from the balance sheet," Mr. Thomson said in a February phone interview. "Bulk lump sums and annuities are both the tool set to do that."
During the nine months ended Sept. 30, Unisys contributed $340 million to its worldwide pension funds and plans to make additional cash contributions totaling $486 million before the end of the year. Of the total $826 million Unisys expects to contribute, $793 million will go to the U.S. plans.
As of Dec. 31, 2020, U.S. pension plan assets totaled $3.334 billion, while projected benefit obligations totaled $4.756 billion, for a funding ratio of 70.1%, according to the company's most recent 10-K filing.
Unisys spokesman John Clendening could not be immediately reached for further information.