The Prudential Insurance Company of America, a subsidiary of US insurance and investment firm Prudential Financial, Inc., has entered into a deal to take on $2.4 billion of pension liabilities from health care provider Baxter International.
Under the agreement, Prudential will assume future benefit obligations and annuity administration for certain retirees and beneficiaries of a Baxter pension plan, via the purchase of a group annuity contract.
Upon payment of a premium to Prudential, the pension benefit obligations of approximately 17,200 participants will be transferred to the insurer.
Baxter believes the transfer of these obligations will guarantee that pension benefits are provided to participants of the pension plan.
The company added that it will fund the group annuity contract directly using assets of the plan, and that it does not expect to make additional contributions to the plan prior to closing the transaction.
Prudential is expected to assume responsibility for plan payments after December 31, 2019.
The parties also confirmed that benefits payable to participants in the scheme will not be reduced as a result of the transaction.
State Street Global Advisors Trust Company was also involved in the transaction, acting solely in its capacity as the independent fiduciary of the Baxter pension plan.