Alcoa Corporation today announced the purchase of group annuity contracts that will facilitate the transfer of approximately $235 million of pension obligations and assets associated with defined benefit pension plans for certain Canadian retirees and beneficiaries.
The transfer, which will be complete later this month, further enhances the Company’s strong balance sheet, reduces the risk from volatility in pension plan obligations, and continues to meet commitments to retirees and beneficiaries.
This is the Company’s sixth pension annuity transaction for a total transfer of approximately $3.6 billion in pension obligations and assets since 2018.
The latest group annuity contracts, which required no cash funding from Alcoa, will be executed by Industrial Alliance Insurance and Financial Services Inc. and will cover approximately 500 participants in the Canadian pension plans. Participants will not have any change in their benefits, and Industrial Alliance Insurance and Financial Services Inc. will assume the payment obligations beginning in September 2023.
In the second quarter of 2023, Alcoa expects to record a non-cash settlement charge of approximately $18 million ($13 million after-tax, or $0.07 per share) related to this annuity transaction.
TELUS Health acted as advisor to Alcoa Corporation in this transaction.
About Alcoa Corp.
Alcoa (NYSE: AA) is a global industry leader in bauxite, alumina and aluminum products with a vision to reinvent the aluminum industry for a sustainable future. With a values-based approach that encompasses integrity, operating excellence, care for people and courageous leadership, our purpose is to Turn Raw Potential into Real Progress. Since developing the process that made aluminum an affordable and vital part of modern life, our talented Alcoans have developed breakthrough innovations and best practices that have led to greater efficiency, safety, sustainability and stronger communities wherever we operate.
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