MetLife has signed an agreement to provide pension benefits to 7,045 retirees and current beneficiaries in TRW’s DB plan in a US$440-million ($511.5-million) transaction.
This transaction follows TRW’s recent announcement that the company had entered into a partial buyout agreement with Legal & General Assurance Society related to £2.5 billion ($4.5 billion) of its U.K. pension scheme.
Both transactions are part of TRW’s overall plan to reduce its pension liabilities in the U.K., U.S. and Canada.
For this U.S. transaction, TRW purchased a group annuity contract from MetLife; as a result, the insurance company will take over pension payments to the retirees and beneficiaries covered by the agreement.
The transaction maintains the amount of the monthly pension benefit received by covered retirees and surviving beneficiaries. MetLife, rather than TRW, is responsible for making these monthly payments following the close of the transaction; no action is needed by the retiree/beneficiary.
“The buyout with TRW is one of several MetLife has closed over the last few months,” says Wayne Daniel, senior vice-president, U.S. pensions, with MetLife. “The number of deals we have closed this year and last year, as well as our consistently robust new business pipeline, suggests plan sponsors are not just considering but beginning to take action when it comes to reducing their pension risk.”
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