Accenture Reduces U.S. Pension Obligations by $1.6 Billion Through Previously Announced Plan Termination, Following Asset Tra...
June 23 2017 - 06:59AM
Business Wire
Accenture (NYSE:ACN) has completed the termination of its U.S.
Pension Plan (the “Plan”), which was previously announced in March
2016, by entering into agreements with American General Life
Insurance Company (AGL) – a subsidiary of American International
Group, Inc. (AIG) – and Massachusetts Mutual Life Insurance Co.
(MassMutual). Under these agreements, the Plan has transferred
pension assets to AGL and MassMutual to settle approximately
$1.0 billion of outstanding pension obligations. The annuity
settlement is part of Accenture’s three-step strategy to reduce its
pension obligations, as follows:
- Plan
Termination: The Plan’s termination removed a total of $1.6
billion of pension obligations: about $600 million through lump-sum
payments to approximately 7,000 active and former U.S. employees
who elected to receive such payments, and $1.0 billion through the
purchase of annuities from insurance companies.
- Annuity
Purchase: Accenture purchased group annuity contracts from
AGL and MassMutual, which are each responsible for assuming a
portion of the obligation to make future annuity payments to
approximately 9,200 active and former U.S. Accenture employees and
their beneficiaries. The transaction closed in late May and the
insurers will assume payment responsibility in August 2017.
- New Pension
Plan: Accenture has created a new, fully funded, defined
benefit plan with approximately $200 million of pension obligations
with substantially the same terms as the Plan for approximately 550
active U.S. employees who remain eligible to accrue benefits.
Designated Plan fiduciaries selected AGL and MassMutual as the
annuity providers. The selection was made in consultation with
independent experts after a thorough annuity provider search and
due diligence process, and in accordance with the U.S. Department
of Labor’s “safest available annuity” standards. Key advisors to
Accenture included Mercer (US) Inc. as lead strategic and annuity
placement advisor.
Together, these related actions have enabled Accenture to
decrease its overall pension obligations by approximately $1.6
billion, reducing future risk and administrative costs, while
entrusting participants’ benefits to highly rated financial
institutions with core expertise in the long-term management of
retirement benefits.
Affected participants will soon receive letters with further
details.
Forward-Looking Statements
Except for the historical information and discussions contained
herein, statements in this news release may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as “may,”
“will,” “should,” “likely,” “anticipates,” “expects,” “intends,”
“plans,” “projects,” “believes,” “estimates,” “positioned,”
“outlook” and similar expressions are used to identify these
forward-looking statements. These statements involve a number of
risks, uncertainties and other factors that could cause actual
results to differ materially from those expressed or implied. These
include, without limitation, risks that: Accenture’s actions to
decrease its overall pension obligations will not reduce the
company’s pension risk or administrative costs to the extent
expected or otherwise achieve the anticipated benefits for the
company, as well as the risks, uncertainties and other factors
discussed under the “Risk Factors” heading in Accenture plc’s most
recent annual report on Form 10-K and other documents filed with or
furnished to the Securities and Exchange Commission. Statements in
this news release speak only as of the date they were made, and
Accenture undertakes no duty to update any forward-looking
statements made in this news release or to conform such statements
to actual results or changes in Accenture’s expectations.
About Accenture
Accenture is a leading global professional services company,
providing a broad range of services and solutions in strategy,
consulting, digital, technology and operations. Combining unmatched
experience and specialized skills across more than 40 industries
and all business functions – underpinned by the world’s largest
delivery network – Accenture works at the intersection of business
and technology to help clients improve their performance and create
sustainable value for their stakeholders. With more than 411,000
people serving clients in more than 120 countries, Accenture drives
innovation to improve the way the world works and lives. Visit us
at www.accenture.com.
About AIG
American International Group, Inc. (AIG) is a leading global
insurance organization. Founded in 1919, today AIG member companies
provide a wide range of property casualty insurance, life
insurance, retirement products, and other financial services to
customers in more than 80 countries and jurisdictions. These
diverse offerings include products and services that help
businesses and individuals protect their assets, manage risks and
provide for retirement security. AIG’s core businesses include
Commercial Insurance and Consumer Insurance, as well as Other
Operations. Commercial Insurance comprises two modules – Liability
and Financial Lines, and Property and Special Risks. Consumer
Insurance comprises four modules – Individual Retirement, Group
Retirement, Life Insurance and Personal Insurance. AIG common stock
is listed on the New York Stock Exchange and the Tokyo Stock
Exchange.
Additional information about AIG can be found at www.aig.com and
www.aig.com/strategyupdate | YouTube: www.youtube.com/aig |
Twitter: @AIGinsurance www.twitter.com/AIGinsurance | LinkedIn:
www.linkedin.com/company/aig. These references with additional
information about AIG have been provided as a convenience, and the
information contained on such websites is not incorporated by
reference into this press release.
AIG is the marketing name for the worldwide property-casualty,
life and retirement, and general insurance operations of American
International Group, Inc. For additional information, please visit
our website at www.aig.com. All products and services are written
or provided by subsidiaries or affiliates of American International
Group, Inc. Products or services may not be available in all
countries, and coverage is subject to actual policy language.
Non-insurance products and services may be provided by independent
third parties. Certain property-casualty coverages may be provided
by a surplus lines insurer. Surplus lines insurers do not generally
participate in state guaranty funds, and insureds are therefore not
protected by such funds.
About MassMutual
MassMutual is a leading mutual life insurance company that is
run for the benefit of its members and participating policyowners.
MassMutual offers a wide range of financial products and services,
including life insurance, disability income insurance, long term
care insurance, annuities, retirement plans and other employee
benefits. For more information, visit www.massmutual.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20170623005042/en/
AccentureStacey Jones,
+1-917-452-6561stacey.jones@accenture.comorAIG (Media)Kenny Juarez,
+1-212-458-8352kenny.juarez@aig.comorAIG (Investors)Liz Werner,
+1-212-770-7074elizabeth.werner@aig.com
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