Alcoa Corporation Signs Group Annuity Contracts to Transfer Canadian Pension Obligations and Assets
April 03 2018 - 4:10PM
Business Wire
Alcoa Corporation, a global leader in bauxite, alumina, and
aluminum products, has signed group annuity contracts to transfer
approximately $555 million in obligations, and related assets, of
defined benefit pension plans in Canada.
The transfer, which will be complete later this month, is
aligned with Alcoa’s strategic priority to strengthen its balance
sheet by lowering the Company’s risk to volatility from its pension
plan obligations.
The group annuity contracts with three Canadian insurance
companies1 will cover approximately 2,100 retirees or
beneficiaries. The companies will begin making benefit payments to
the affected plan participants by July 2018. The timing and amounts
of retirees’ current monthly benefit payments will not change.
In the second quarter of 2018, Alcoa expects to record a
non-cash settlement charge of approximately $175 million ($128
million after-tax, or $0.68 per share) due to these annuity
transactions.
As part of the annuity agreements, Alcoa will contribute
approximately $95 million in mid-April 2018 to facilitate the
annuity transaction and maintain the funding level of the remaining
plan obligations. This amount represents a portion of the $300
million in incremental contributions the Company anticipates making
in 2018 to the U.S. and Canadian defined benefit pension plans, as
previously announced on January 17.
1 The three firms are Sun Life Financial, Desjardins Financial
Security Life Assurance Company, and Industrial Alliance Insurance
and Financial Services Inc. (IAFS). Morneau Shepell acted as
advisor to Alcoa Corporation in this transaction.
About Alcoa
Alcoa (NYSE: AA) is a global industry leader in bauxite,
alumina, and aluminum products, and is built on a foundation of
strong values and operating excellence dating back nearly 130 years
to the world-changing discovery that made aluminum an affordable
and vital part of modern life. Since developing the aluminum
industry, and throughout our history, our talented Alcoans have
followed on with breakthrough innovations and best practices that
have led to efficiency, safety, sustainability, and stronger
communities wherever we operate. Visit us online on www.alcoa.com,
follow @Alcoa on Twitter, and on Facebook at
www.facebook.com/Alcoa.
Dissemination of Company Information
Alcoa Corporation intends to make future announcements regarding
company developments and financial performance through its website
at www.alcoa.com.
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expectations reflected in any forward-looking statements are based
on reasonable assumptions, it can give no assurance that these
expectations will be attained and it is possible that actual
results may differ materially from those indicated by these
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whether in response to new information, future events or otherwise,
except as required by applicable law.
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version on businesswire.com: https://www.businesswire.com/news/home/20180403006503/en/
Alcoa CorporationInvestor ContactJames Dwyer,
412-992-5450James.Dwyer@alcoa.comorMedia ContactJim Beck,
412-315-2909Jim.Beck@alcoa.com
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