Alcoa purchases another annuity contract for Canadian pension liabilities

Alcoa Corp., Pittsburgh, purchased a group annuity contract from Industrial Alliance Insurance and Financial Services Inc. to transfer $235 million in Canadian pension plan liabilities.

The aluminum company disclosed the transaction in an 8-K filing with the SEC on April 14.

It is Alcoa's sixth pension buyout transaction in Canada or the U.S. since 2018, and affects approximately 500 Canadian retirees and beneficiaries, according to the 8-K filing.

Industrial Alliance Insurance and Financial Services Inc. will assume the responsibility for paying the benefits to the population in September.

This new transaction is the second Canadian transaction for the company. In 2018, Alcoa purchased group annuity contracts from Sun Life Financial, Desjardins Financial Security Life Assurance Co. and Industrial Alliance Insurance and Financial Services Inc. to transfer a total of about $555 million in Canadian defined benefit plan obligations, which affected a total of about 2,100 retirees and their beneficiaries in July.

Alcoa's most recent U.S. pension buyout transaction took place in August. The company purchased group annuity contracts from two Athene Holdings subsidiaries to transfer about $1 billion in U.S. pension plan liabilities.

As of Dec. 31, Alcoa's pension plan assets totaled $2.434 billion, while projected benefit obligations totaled $2.518 billion, for a funding ratio of 96.7%, according to its most recent 10-K filing. A split between U.S. and Canadian assets was not provided.

Alcoa spokesman Jim W. Beck could not be immediately reached for further information.