3M has purchased a group annuity contract from Met Tower Life and will transfer a portion of its US pension payment obligations under the 3M Employee Retirement Income Plan (ERIP) Met Tower Life.
Under the contract, 3M will transfer approximately $2.5bn of its defined benefit pension obligations and related plan assets for approximately 23,000 US retirees and beneficiaries to Met Tower Life, representing approximately 60% of ERIP retiree participants. The contract was purchased using assets from 3M’s ERIP trust and no additional funding contribution was required as part of this transaction, according to the firm.
Met Tower Life will begin paying and administering the retirement benefits of the retirees and beneficiaries included in this annuity transfer on 1st October this year.
3M expects to recognise an estimated non-cash pre-tax non-operating pension settlement charge of between $0.8 and $0.9bn in the quarter ending 30th June 2024 as a result of the transaction.
