Reinsurance News

Athene helps take on $940mn of pension liabilities from Dana Incorporated

26th June 2019 - Author: Matt Sheehan

Athene Holding Ltd., the Bermudian retirement services company owned by private equity firm Apollo Global Management, has taken on a portion of a $940 million block of pension liabilities from Dana Incorporated, a provider of power-conveyance and energy-management solutions for vehicles and machinery.

athene-holding-logoUnder the agreement, Dana will transfer all the outstanding pension benefit obligations associated with its largest U.S defined benefit plan to Athene Annuity and Life Company.

This is with the exception of New York residents, which will be transferred to Companion Life Insurance Company, a subsidiary of United of Omaha Life Insurance Company.

Dana contributed $62 million of additional cash to the plan to facilitate the transfer, which is expected to enhance the company’s credit profile and improve its balance sheet.

The combination of the annuity purchase and a lump-sum offer in May 2019 removes nearly $940 million of pension obligations from Dana’s balance sheet, of which approximately $166 million was previously unfunded.

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The transaction involves no changes to plan benefits for any affected participants, to whom Athene and Companion will begin making monthly payments from October 1, 2019.

“Dana is committed to fulfilling its pension obligations,” said Jonathan Collins, Executive Vice President and Chief Financial Officer at Dana.

“These agreements allow us to fully fund the plan, which will now be paid and administered by secure and reputable insurance companies and backed by the state guaranty association in the state where participants live,” he explained. “For plan participants, nothing really changes except the company that administers and provides the benefit. The actual benefit does not change.”

Athene and Companion were selected by State Street Global Advisors, who acted as the independent fiduciary for the transaction.

Willis Towers Watson served as strategic advisor, and Winston & Strawn LLP served as the legal advisor to Dana on the transaction.  Goldman Sachs served as the asset manager to the plan.

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