Updated with correction
Unisys Corp., Blue Bell, Pa., plans to transfer about $1 billion in global pension plan liabilities over the next six months through a series of pension risk transfer transactions.
The company plans to shed the liabilities through "a combination of bulk lump-sum buyouts, annuity purchases and other actions," according to its 10-Q filing Tuesday with the SEC.
John J. Clendening, Unisys spokesman, said in an email that the company made an offer to a group of plan participants to receive lump-sum payments. The company hopes to transfer $200 million to $350 million in U.S. pension liabilities specifically as a result of that offer. That process is expected to be completed by the end of 2020, Mr. Clendening said. He declined to provide further information.
Unisys had announced in February its plans to contribute about $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."
According to the 10-Q filing, Unisys plans to contribute more to the plans by the end of the year than originally planned. 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 plans to contribute, $793 million with go to the U.S. plans.
Unisys has begun the process to execute the PRT transactions, according to the 10-Q filing, but specific plans were not disclosed.
As of Dec. 31, 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.
