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Alcoa to transfer $290M in assets, obligations of pension plans for US retirees

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Alcoa to transfer $290M in assets, obligations of pension plans for US retirees

Alcoa Corp. has signed a group annuity contract to transfer about $290 million in assets and related obligations of defined benefit pension plans for certain U.S. retirees and beneficiaries to Athene Annuity & Life Co., a subsidiary of Athene Holding Ltd.

Athene will assume benefit payments for about 10,500 participants. The payments will begin in October.

Alcoa also made a discretionary contribution of $100 million to further fund its U.S. defined benefit pension plans.

Separately, Alcoa notified some U.S. salaried retirees that the company will stop providing retiree life insurance, effective Sept. 1. It will make a one-time transition payment to the affected retirees totaling about $25 million.

In connection with the annuity transaction and the elimination of retiree life insurance, Alcoa will record an estimated noncash net settlement charge of $184 million, pre- and after-tax, or 98 cents per share, in the third quarter.