Global technology solutions company, Unisys has closed agreements with insurer F&G Annuities & Life, Inc. to purchase group annuity contracts totalling approximately $250 million.
Through these contracts, Unisys will transfer projected benefit obligations valued at a similar amount related to certain retirees under one of the company’s U.S. pension plans to F&G.
This agreement marks the fourth U.S. retiree buyout since the beginning of 2021, reflecting a continuation of efforts to reduce pension liabilities volatility and cost while securing retiree pension benefits with highly-rated insurance companies.
As part of the transfer, F&G’s insurance subsidiaries, Fidelity & Guaranty Life Insurance Company and Fidelity & Guaranty Life Insurance Company of New York, will assume responsibility for pension benefits for approximately 3,900 retirees and beneficiaries with monthly benefits lower than certain thresholds.
There will be no changes to the gross amount, timing, or form of the monthly pension payments.
Unisys forecasts this deal to result in a one-time, non-cash, pre-tax settlement charge of approximately $244 million.
Since the purchase will be made by the pension trust, there will be no impact on the company’s cash position.
Deb McCann, Unisys Chief Financial Officer, commented, “Purchasing these annuity contracts demonstrates the company’s continued commitment to de-risking its pension obligations.”
