Unisys buys group annuity to transfer $235 million in liabilities

Unisys Corp., Blue Bell, Pa., purchased a group annuity contract from Massachusetts Mutual Life Insurance Co. to transfer about $235 million in U.S. pension plan liabilities.

The transaction, which was completed on Oct. 14, transfers the benefit-paying responsibility for about 6,900 retirees to the insurer, confirmed Tony Buglione, Unisys spokesman, in an email.

It is the information technology solutions company's fourth derisking transaction in the past year.

In May, Unisys transferred the assets of its Dutch subsidiary's primary pension plan to De Nationale APF, a multiemployer pension plan in the Netherlands, eliminating $550 million in pension liabilities from its balance sheet.

In January, Unisys entered into an agreement to purchase a group annuity contract from MassMutual to transfer about $280 million in U.S. pension plan assets. That transaction transferred the responsibility to MassMutual of paying benefits to about 11,600 retirees and beneficiaries.

In December the company announced it made lump-sum payments totaling $276 million to former U.S. employees who accepted an offer from the company.

Unisys had announced nearly two years ago 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 2020 phone interview. "Bulk lump sums and annuities are both the tool set to do that."

As of Dec. 31, U.S. pension plan assets totaled $3.85 billion, while projected benefit obligations totaled $4.545 billion, for a funding ratio of 84.7%, according to the company's latest 10-K filing with the SEC.