NEW YORK CITY (dpa-AFX) - Biopharmaceutical company Bristol-Myers Squibb Co (BMY) said Tuesday it will settle $1.4 billion in pension obligations through the purchase of a group annuity contract from Prudential Insurance Co of America (PRU) for about 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 said its U.S. Retirement Plan ('the 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, which is well-funded.
Bristol-Myers said 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.
The company said it is committed to the long-term financial health of the Plan and has taken steps to protect all participants of the Plan.
The transfer to Prudential is expected to occur in December 2014 and is subject to satisfaction of closing conditions. Upon completion of the transfer, Prudential will assume full financial responsibility for making the annuity payments provided under the group annuity contract.
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