October 1, 2015 –The U.S. subsidiary of Royal Philips has entered into agreements to purchase group annuity contracts from The Prudential Insurance Company of America, Banner Life Insurance Company, the primary U.S. insurance subsidiary of Legal & General America (Legal & General America), and American United Life Insurance Company, a OneAmerica company (OneAmerica).
The transfer will reduce Philips’ pension liabilities by approximately EUR 1 billion (approximately $1.1 billion USD).
Obligations to current retirees are being split between Prudential and Legal & General America with each insurer providing 50 percent of the total monthly benefits to Philips retirees. Furthermore, OneAmerica will be issuing annuities to certain plan participants who had not yet retired by mid 2015. The total transfer will cover approximately 17,000 former U.S. employees and their beneficiaries.
Under the agreement, which was announced Oct. 1, retirees covered by Prudential’s and Legal & General America’s contracts will receive their benefit payments directly from Prudential, which will be the annuity administrator.
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