International Paper has entered into an agreement with The Prudential Insurance Company of America to purchase a group annuity contract and transfer approximately $1.3 billion of International Paper's U.S. qualified pension plan projected benefit obligations.
The transaction will be funded with pension plan assets, and at the end of 2017, Prudential will assume responsibility for pension benefits and annuity administration for approximately 45,000 former employees or their beneficiaries receiving less than $450 in monthly benefit payments from the plan.
The transaction is expected to close on October 3, 2017, subject to customary closing conditions. There will be no change to the pension benefits for any plan participants as a result of the transaction. Retirees and beneficiaries who will be covered by this transaction will be receiving individualized information packages with further details and answers to frequently asked questions.
As a result of the transaction, the Company expects to recognize a non-cash pension settlement charge of approximately $400 million before tax ($247 million after tax) in the 4Q 2017.
International Paper is a leading global producer of renewable fiber-based packaging, pulp and paper products with manufacturing operations in North America, Latin America, Europe, North Africa and Russia.
