Bristol-Myers Squibb will settle US$1.4 billion in pension obligations through the purchase of a group annuity contract from The Prudential Insurance Company of America.

The agreement covers approximately 8,000 U.S. retirees and their beneficiaries who started receiving their monthly retirement benefit payments on or before June 1, 2014.

Bristol-Myers Squibb says its U.S. retirement plan is in a strong financial position, and the obligations associated with this transaction will require no additional cash contributions by the company. There will be no change to the monthly retirement benefit payments currently received by retirees and their beneficiaries.

All other plan participants will stay in the company’s plan.

“The transaction reduces risk in the plan and better manages the ongoing variations in cost associated with its maintenance while entrusting current retirees and their beneficiaries’ pensions to a financial institution with expertise in the long-term management of retirement benefits,” according to a statement from Bristol-Myers Squibb.

This is the second pension transfer deal in as many weeks for Prudential. Last week, it agreed to assume responsibility for the monthly pension benefits for Motorola Solutions’ retirees.

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Copyright © 2020 Transcontinental Media G.P. Originally published on benefitscanada.com

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