Metallus Inc has entered into an agreement to purchase a group annuity contract from The Prudential Insurance Company of America in connection with the termination of the TimkenSteel Corporation Retirement Plan (Salaried Pension Plan). The transaction settles approximately $121m of the company’s remaining US pension obligations.
Prudential will pay future benefits under the group annuity contract starting August 1, 2024, for the remaining approximately 1,000 participants in scheme.
“Prudential was carefully selected as a highly rated and experienced retirement benefits provider,” said Kris Westbrooks, Metallus’ Executive Vice President and Chief Financial Officer. “Following the Bargaining Pension Plan partial annuitisation in 2022, the termination of the Salaried Pension Plan is another significant step towards strengthening our balance sheet and de-risking our legacy pension plans.”
The termination of the Salaried Pension Plan is expected to reduce Metallus’ US pension obligation by approximately $124m, or 20 percent. The company expects to realise a non-cash pension settlement gain of approximately $3m in the second quarter.
