IBM to Transfer $6b of Pension Obligations to Prudential

IBM buys group annuity contract that transfers $6 billion of defined benefit pension obligations to Prudential.

• Contract covers about 32,000 plan participants and beneficiaries
• Prudential will pay the participants’ pension benefits starting Jan. 1, 2025
• Contract purchase was funded by the IBM plan’s assets and no cash contribution was required
• Expects pretax pension settlement charge of $2.7b in 3Q, or $2b net of tax; won’t impact 3Q or full-year 2024 adjusted operating profit or free cash flow

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Rachel Phua in New York at rphua17@bloomberg.net ...