BLUE BELL, PA — Unisys (NYSE: UIS), the Montgomery County, Pennsylvania-based global technology solutions company, has announced a significant move in its pension management strategy. The company recently closed agreements with F&G Annuities & Life, Inc. (NYSE: FG) to purchase group annuity contracts totaling approximately $250 million. This purchase allows Unisys to transfer the projected benefit obligations of a similar amount related to certain retirees under one of the company’s U.S. pension plans to F&G.
With this transfer, F&G’s insurance subsidiaries, Fidelity & Guaranty Life Insurance Company and Fidelity & Guaranty Life Insurance Company of New York, will assume responsibility for pension benefits for approximately 3,900 retirees and beneficiaries who receive monthly benefits below certain thresholds. Importantly, there will be no changes to the gross amount, timing, or form of these monthly pension payments.
The transaction is expected to result in a one-time, non-cash, pre-tax settlement charge of approximately $244 million. However, since the purchase will be made by the pension trust, Unisys’s cash position will remain unaffected.
Unisys Chief Financial Officer Deb McCann commented on the deal, stating, “Purchasing these annuity contracts demonstrates the company’s continued commitment to de-risking its pension obligations.”
This move is indicative of an emerging trend among companies to offload pension liabilities to insurers, thus reducing the financial risks associated with long-term pension commitments. For Unisys, this strategic move aims to bolster the company’s financial position and build investor confidence by effectively managing its pension obligations.
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