PITTSBURGH--(BUSINESS WIRE)--
Alcoa Corporation, a global leader in bauxite, alumina, and aluminum
products, has signed group annuity contracts to transfer approximately
$555 million in obligations, and related assets, of defined benefit
pension plans in Canada.
The transfer, which will be complete later this month, is aligned with
Alcoa’s strategic priority to strengthen its balance sheet by lowering
the Company’s risk to volatility from its pension plan obligations.
The group annuity contracts with three Canadian insurance companies1
will cover approximately 2,100 retirees or beneficiaries. The companies
will begin making benefit payments to the affected plan participants by
July 2018. The timing and amounts of retirees’ current monthly benefit
payments will not change.
In the second quarter of 2018, Alcoa expects to record a non-cash
settlement charge of approximately $175 million ($128 million after-tax,
or $0.68 per share) due to these annuity transactions.
As part of the annuity agreements, Alcoa will contribute approximately
$95 million in mid-April 2018 to facilitate the annuity transaction and
maintain the funding level of the remaining plan obligations. This
amount represents a portion of the $300 million in incremental
contributions the Company anticipates making in 2018 to the U.S. and
Canadian defined benefit pension plans, as previously announced on January
17.
1 The three firms are Sun Life Financial, Desjardins
Financial Security Life Assurance Company, and Industrial Alliance
Insurance and Financial Services Inc. (IAFS). Morneau Shepell acted as
advisor to Alcoa Corporation in this transaction.
About Alcoa
Alcoa (NYSE: AA) is a global industry leader in bauxite, alumina, and
aluminum products, and is built on a foundation of strong values and
operating excellence dating back nearly 130 years to the world-changing
discovery that made aluminum an affordable and vital part of modern
life. Since developing the aluminum industry, and throughout our
history, our talented Alcoans have followed on with breakthrough
innovations and best practices that have led to efficiency, safety,
sustainability, and stronger communities wherever we operate. Visit us
online on www.alcoa.com,
follow @Alcoa on Twitter, and on Facebook at www.facebook.com/Alcoa.
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risks, uncertainties, and changes in circumstances that are difficult to
predict. Although the Company believes that the expectations reflected
in any forward-looking statements are based on reasonable assumptions,
it can give no assurance that these expectations will be attained and it
is possible that actual results may differ materially from those
indicated by these forward-looking statements due to a variety of risks
and uncertainties. Additional information concerning factors that could
cause actual results to differ materially from those projected in the
forward-looking statements is contained in our filings with the
Securities and Exchange Commission. The Company disclaims any obligation
to update publicly any forward-looking statements, whether in response
to new information, future events or otherwise, except as required by
applicable law.
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Alcoa Corporation
Investor Contact
James Dwyer, 412-992-5450
James.Dwyer@alcoa.com
or
Media
Contact
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Source: Alcoa Corporation