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International Paper expects to take a pretax non-cash pension
settlement charge of about $400 million in the fourth quarter.
The deal will close Oct. 3.
Prudential will assume responsibility for pension benefits of
around 45,000 former International Paper employees at the end of
2017, International Paper said. http://reut.rs/2xKJflj
U.S. insurers have been buying corporate pension plans at a
record clip as rising interest rates and all-time high
stock-market values give companies an opportunity to offload
them.
Calculating they can make more money from selling companies an
annuity to cover the cost of the pension plans, and then invest
the proceeds in bonds and other securities, insurers are
competing to persuade corporate America to sell them their
pensions.
Pension transfers of $13.7 billion were finalized last year, up
1 percent from 2015, according to LIMRA, an industry trade
group. The figure is the second highest annual total ever
recorded, LIMRA said.
The average corporate pension fund was 83 percent funded in May,
according to Mercer Investment Consulting.
In June, consulting and outsourcing services provider Accenture
Plc <ACN.N> transferred $1.6 billion in pension obligations to
insurers American International Group Inc <AIG.N> and MassMutual.
(Reporting By Aparajita Saxena in Bengaluru; Editing by Savio
D'Souza, Bernard Orr)
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