WestRock To Settle $2.5B Pension Obligations To Manage Cost
Zacks Investment Research | Sep 09, 2016 06:41AM ET
WestRock Company (NYSE:WRK) said that it will settle $2.5 billion in pension obligations of the WestRock Company Consolidated Pension Plan. The transaction will help in managing future pension cost and risk of the company.
Notably, the transaction will occur through the purchase of a group annuity contract using plan assets. Per the deal, WestRock will transfer payment responsibility for retirement benefits owed to roughly 35,000 U.S. retirees and their beneficiaries to The Prudential (LON:PRU) Insurance Company of America, a subsidiary of Prudential Financial, Inc. (NYSE:PRU) .
The settlement will reduce WestRock’s overall U.S. pension obligations by around 40%. The monthly retirement benefit payment amounts currently received by retirees and their beneficiaries will not change. Those plan participants not included in the settlement transaction are staying in the plan.
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