AMSTERDAM (dpa-AFX) - Dutch supermarkets and eCommerce company Ahold Delhaize N.V. (ADRND.PK, AHODF.PK) said that its U.S. brand Stop & Shop reached a tentative agreement to terminate its participation in the United Food & Commercial Workers International Union (UFCW) - Industry Pension Fund or the 'National Plan'.?
The company noted that tentative agreement does importantly improve the security of pension benefits for associates as well as reduces financial risk for the company. If ratified by the UFCW Locals, the transaction will be treated as an extraordinary item and will therefore not impact the underlying operating results outlook for 2020.
Pending ratification of this agreement, Stop & Shop expects to pay the National Plan withdrawal liability of $649 million, on a pre-tax basis, to fulfill Stop & Shop's obligations for past service for associates and retirees in the National Plan.
Stop & Shop will also make an $18 million contribution to a transition reserve for a new variable annuity pension plan. On an after-tax basis, the withdrawal liability and contribution to the transition reserve total approximately $500 million.
The withdrawal liability will be satisfied by installment payments to the National Plan over the next three years.
Kroger and Albertsons have also entered into separate tentative agreements with the UFCW Locals and the National Plan Trustees to withdraw from the National Plan. Together, Ahold Delhaize's brand Stop & Shop, Kroger, and the UFCW Locals plan to create the UFCW International Union-Industry Variable Annuity Pension Plan for future benefits.
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