The Prudential Insurance Company of America has signed an agreement with Motorola Solutions to assume certain salaried retiree benefit obligations as part of Motorola Solutions' plan to reduce pension obligations by approximately $3 billion.
Motorola Solutions also reported that it will offer eligible U.S. pension plan participants the opportunity to apply for lump sum pension payments. In total, the company reported, these actions are expected to reduce its ongoing U.S. pension obligation by $4.2 billion. The company plans to contribute $1.1 billion in cash to its U.S. pension plans in 2014.
“Pension liabilities have become an increasing concern for corporations around the world,” says Phil Waldeck, the senior vice president and head of pensions and structured solutions for Prudential retirement. “Over the past few years, Prudential has been very focused on working with plan sponsors — like Motorola Solutions — to help them reduce pension risk while also providing retirement security to their retirees.”
“We have substantially reduced the funding volatility associated with our pension plans while protecting benefits for retirees,” said Gino Bonanotte, the Motorola Solutions chief financial officer. “Our retirees' benefits are not changing, just who provides them.”
Upon closing, which is expected by year-end 2014, Motorola Solutions said it planned to purchase a group annuity contract from Prudential, at which time Prudential would assume the responsibility to provide benefits to approximately 30,000 Motorola Solutions retirees covered by the agreement.
Learn more: http://www.prudential.com.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].