NEW YORK CITY (dpa-AFX) - Alcoa Corp. (AA) announced the signing of a group annuity contract to transfer assets and related obligations of defined benefit pension plans for certain U.S. retirees and beneficiaries. As part of the annuity contract, approximately $290 million in obligations and related assets will be transferred later in the current month to Athene Annuity and Life Company, a subsidiary of Athene Holding, Ltd. (ATH). Athene will assume benefit payments for approximately 10,500 participants.
Separately, Alcoa notified certain U.S. salaried retirees that the company will no longer provide retiree life insurance, effective September 1, 2018. As part of the change, Alcoa will make a one-time transition payment to the affected retirees totaling approximately $25 million.
In connection with both the annuity transaction and the elimination of retiree life insurance, Alcoa will record an estimated non-cash net settlement charge of $184 million, or $0.98 per share, in the third quarter of 2018.
The company also has made a discretionary contribution of $100 million to further fund its U.S. defined benefit pension plans.
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