Unisys Corp., an IT services company, recently completed its lump-sum, cash-out offer for eligible former employees who opted to receive the value of their entire pension benefits as a lump-sum payment and deferred benefits under the company’s U.S. pension plans.
Approximately 3,500 eligible former employees accepted the offer, the equivalent of approximately $276 million of the company’s pension trust. The lump-sum payments will be taken out of the trust.
This reduces the number of participants in the company’s plans by 6 percent. It also cuts annual administrative costs, including Pension Benefit Guaranty Corporation premiums, the company said.
“Completing this offer represents the first step in our plan to reduce global pension liabilities by approximately $1 billion by the end of the first quarter of 2021,” Mike Thomson, Unisys chief financial officer, said. “We are taking additional steps both with respect to our U.S. plans and non-U.S. plans, including an annuity purchase transaction valued at approximately $250 million within our U.S. plans that is expected to be completed in early 2021.”
Unisys reduced its required U.S. pension contributions and deficit by contributing approximately $800 million to its U.S. pension plans earlier this year.
According to actuarial estimates, the company will soon have pre-funded all but approximately $50 million of its required U.S. pension contributions.