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All About Annuities » AkzoNobel To Purchase Annuities For US Pension Obligations

AkzoNobel To Purchase Annuities For US Pension Obligations

AkzoNobel To Purchase Annuities For US Pension Obligations
News from AftermarketNews.com (AMN):

AkzoNobel To Purchase Annuities For U.S. Pension Obligations

THE NETHERLANDS – AkzoNobel has agreed to transfer its obligations for monthly pension payments for current retirees in the U.S. to insurance company MetLife.
 
The annuity purchase is expected to reduce AkzoNobel’s U.S. pension obligations by approximately $ 655 million, or 65 percent, of the total U.S. pension plan. In recognition of the premium payable to MetLife, and in order to maintain its pre-transaction funded status, AkzoNobel has paid a contribution to the pension plan of $ 170 million.
 
“Part of our strategy is to de-risk pension liabilities over time,” said AkzoNobel CFO Keith Nichols. “This transaction will improve the company’s financial health by reducing the risk of a significant unexpected business expense due to the volatile nature of maintaining a defined benefit pension. At the same time, this allows AkzoNobel to focus on its core businesses and serving its customers.”
 
The annuity purchase will cover around 9,400 U.S. retirees and beneficiaries who retired prior to October 2013. The payment administration for the pension benefits is expected to transfer to MetLife by the end of the first quarter of 2014.
 
During Q4 2012 and Q3 2013, AkzoNobel…………… continues on AftermarketNews.com (AMN)

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