Chemicals firm purchasing group annuity for retireesReprints
Chemtura Corp., Philadelphia, is purchasing a group annuity contract from Voya Retirement Insurance and Annuity Co. to transfer the pension benefits of about 5,000 of its U.S. retirees, the company announced in a news release Monday.
The global specialty chemicals firm said it estimates a $350 million to $375 million reduction in its U.S. projected benefit obligations and expects to make a cash contribution to the pension fund in the first quarter of between $30 million and $40 million. The company did not state the premium amount, but said it would be funded by plan assets.
Voya will begin making benefit payments to those retirees on May 1. The population being transferred consists of U.S. retirees receiving payments as of Sept. 1, 2015, of less than $2,000 per month.
The pension fund was frozen to U.S. non-bargained employees on Jan. 1, 2006. Chemtura also offered a lump-sum window to terminated vested participants who have yet to retire that ended on Oct. 31, 2014. The company did not provide the number of participants who took the offer but did say it reduced its plan assets and pension benefit obligations by about $52 million.
As of Dec. 31, U.S. pension fund assets totaled $531 million, while the liabilities totaled $598 million, for a funding ratio of 88.8%.
Independent fiduciary Evercore Trust Co. assisted on the annuity buyout.
A Chemtura spokesman could not be immediately reached to provide further information.
Rob Kozlowski writes for Pensions & Investments, a sister publication of Business Insurance.