Alcoa Corp. recently purchased group annuity contracts that will facilitate the transfer of approximately $235 million in pension obligations and assets.
These are associated with defined benefit pension plans for approximately 500 participants in the Canadian pension plans.
Since 2018, Alcoa has transferred approximately $3.6 billion in pension obligations and assets. This is the company’s sixth pension annuity transaction.
The transfer helps meet the company’s commitments to retirees and beneficiaries, reduces the risk from volatility in pension plan obligations, and enhances a strong balance sheet.
Industrial Alliance Insurance and Financial Services will execute the latest group annuity contracts and assume payment obligations in September.
Plan participants will not have any change in their benefits.
The transfer, which required no cash funding from Alcoa, will be completed later this month.
Alcoa expects to record a non-cash settlement charge of approximately $18 million related to this annuity transaction during the second quarter of the year.
Alcoa is a bauxite, alumina, and aluminum products company. The company will release first quarter results on Wednesday. Financial experts forecast revenues of approximately $2.76 billion, a decline of approximately 16 percent from the first quarter of 2022. The decrease is attributed to high natural gas prices and the lower quality of bauxite.