Alcoa buys group annuity contracts for certain Canadian retirees, beneficiaries

Alcoa announced the purchase of group annuity contracts that will facilitate the transfer of approximately $235M of pension obligations and assets associated with defined benefit pension plans for certain Canadian retirees and beneficiaries. The transfer, which will be complete later this month, further enhances the company’s strong balance sheet, reduces the risk from volatility in pension plan obligations, and continues to meet commitments to retirees and beneficiaries. This is the company’s sixth pension annuity transaction for a total transfer of approximately $3.6B in pension obligations and assets since 2018. The latest group annuity contracts, which required no cash funding from Alcoa, will be executed by Industrial Alliance Insurance and Financial Services Inc. and will cover approximately 500 participants in the Canadian pension plans. Participants will not have any change in their benefits, and Industrial Alliance Insurance and Financial Services Inc. will assume the payment obligations beginning in September. In the second quarter of 2023, Alcoa expects to record a non-cash settlement charge of approximately $18M related to this annuity transaction.