3M Offloads Part Of U.S. Pension Plan Obligations to MetLife

By Colin Kellaher

3M is shedding a large chunk of its U.S. pension obligations through the purchase of a group annuity contract from a unit of MetLife.

3M on Thursday said it will transfer about $2.5 billion of defined benefit pension obligations and related assets for roughly 23,000 U.S. retirees and beneficiaries under the 3M Employee Retirement Income Plan, or ERIP, to Metropolitan Tower Life Insurance.

The St. Paul, Minn., conglomerate said the move represents about 60% of ERIP retiree participants, adding that it bought the annuity contract using assets from the plans trust, with no additional funding needed.

Higher interest rates have boosted the funded status of U.S. corporate pension plans, prompting companies to buy annuities from insurers in moves that bolster their balance sheets.

3M said it expects to post a pretax pension settlement charge of $800 million to $900 million in the second quarter.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

June 13, 2024 07:04 ET (11:04 GMT)

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