Alcoa Corp. recently purchased group annuity contracts that will facilitate the transfer of approximately $1 billion in pension obligations and assets for certain retirees and beneficiaries.
The move allows the company to reduce the risk from volatility in pension plan obligations, continue to meet commitments to retirees and beneficiaries, and further enhances a strong balance sheet.
Two subsidiaries of Athene Holding, a retirement services company, will execute the contracts. Athene will assume payments for approximately 4,400 participants in the U.S. pension plans. Alcoa expects the plans will remain more than fully funded after the transfer, and participants will not have any change in their benefits.
The transfer will be complete this month, and Athene will take over payment obligations in November.
Alcoa expects a noncash settlement charge of approximately $635 million related to the transfer during the third quarter.
This is the Alcoa’s fifth pension annuity transaction since 2018 for a total transfer of approximately $3.3 billion in pension obligations and assets.
Athene, through its subsidiaries, specializes in helping its customers achieve financial security and has assets totaling $246.1 billion. It operates in the United States, Canada and Bermuda.
Alcoa is a global industry leader in bauxite, alumina and aluminum products.