Item 8.01 Other Matters
On October 19, 2021, Lumen Technologies, Inc. (“Lumen”), as sponsor of the Lumen Combined Pension Plan (“Plan”), along with the Plan’s independent fiduciary, entered into an agreement committing the Plan to use a portion of its assets to purchase an annuity from an insurance company (“the Insurer”) to transfer approximately $1.4 billion of the Plan’s pension liabilities. This agreement will irrevocably transfer to the Insurer future Plan benefit obligations for approximately 22,600 U.S. Lumen participants in payment (“Transferred Participants”) effective on December 31, 2021 (“Effective Date”), and Lumen will have no financial responsibility for the Transferred Participants’ benefits on or after the Effective Date. This annuity “lift-out” transaction will be funded entirely by existing Plan assets. The lift-out, and other Plan transactions, will result in an estimated $350 million noncash settlement charge in the fourth quarter of 2021 dependent upon the completion of the annuity transaction discussed above and the amount of lump sum pension payments made in the fourth quarter and is not expected to materially change the Plan’s funded status nor expected required contributions.
The Insurer is committed to assume responsibility for administrative and customer service support, including distribution of payments to the Transferred Participants. Transferred Participants’ benefits are not being reduced as a result of this lift-out transaction.
The foregoing description of the above-referenced agreement does not purport to be complete and is qualified in its entirety by the provisions of such agreement.
Forward Looking Statements
Except for the historical and factual information contained herein, the matters set forth in this Current Report on Form 8-K, including statements regarding the timing, scope, financial terms and arrangements, and benefits of the proposed transaction, and other statements identified by words such as “will,” “estimates,” “expects,” “projects,” “plans,” and similar expressions, are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, many of which are beyond our control. Actual events and results may differ materially from those anticipated, estimated or projected if one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect. Factors that could affect actual results include, but are not limited to, changes in the assumptions we use to determine the accounting impact of the above-described transaction. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this Current Report on Form 8-K. Unless legally required, the Company undertakes no obligation and expressly disclaims any such obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
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