Kate Informed
Kate Objective

The opinions and views reflected in the articles posted do not necessarily reflect the views of Hager Strategic. Links to these news features are not part of www.hagerstrategic.com . The owners of these external sites own the intellectual property rights to the material on the linked sites. While Hager Strategic cannot certify the accuracy of the material published on the linked site, we make every effort to post links only to websites and news sources we find reliable and trustworthy.

NEWS - Kimberly-Clark to Transfer Pension Obligations to Insurers

February 23, 2015 – Kimberly-Clark Corp is transferring responsibility for payment of U.S. pensions to two insurers, a move it said would cut its projected benefit obligation by about $2.5 billion but result in a charge of $800 million in the second quarter.

The maker of Kleenex tissues and Huggies diapers joins companies including Timken Co and TRW Automotive Holdings Corp unit TRW in transferring its pension obligations to insurers as a way to reduce risk.

Insurance premiums have been rising, largely because of low interest rates, while retirees are living longer, creating a larger burden on companies’ pension pots.

Kimberly-Clark said on Monday it would buy group annuity contracts to transfer obligations for about 21,000 retirees to Prudential Insurance Co of America and Massachusetts Mutual Life Insurance Co (MassMutual).

On Monday, Kimberly-Clark said it would make a $400-$475 million contribution to its U.S. pension plan to support the transfer, in addition to $100 million it had planned to contribute in 2015.

Prudential and MassMutual will share benefit payments equally, while Prudential will be sole provider of administrative services starting June 1.

Click on the external link below to review the entire article:

http://www.reuters.com/article/2015/02/23/kimberly-clark-pension-idUSL4N0VX2ZS20150223