United Technologies Shifts Pension Risk to Prudential

United Technologies Corp. will reduce its pension risk by approximately $1.77 billion through two separate transactions, the company announced.

United Technologies, which services the aerospace, building and defense industries, will transfer $775 million of its outstanding pension obligations through the purchase of a group annuity contract from Prudential Insurance Co. It also plans to offer lump-sum payouts to certain former U.S. employees and beneficiaries, according to an Oct. 6 news release.

Pension plan de-risking—whereby employers take actions designed to reduce or eliminate the pension plan liability on their balance sheets—has become an increasingly popular transaction in recent years. Some ...