MetLife Strikes Pension Buyout Deal With PPG

MetLife Inc MET disclosed Tuesday that PPG reached a deal with it and Massachusetts Mutual Life Insurance Company to provide annuity benefits to approximately 13,400 retirees in PPG Industries, Inc's PPG defined benefit (DB) pension plans, representing pension obligations of $1.6 billion.

MetLife's SVP for U.S. Pensions, Wayne Daniel, said, "MetLife is pleased to be working with PPG to remove the risks and liabilities associated with its pension plans. As a market leader with 90+ years of experience and $38 billion of transferred pension liabilities, MetLife can provide PPG with the security and knowledge that their risks are well-managed and their participants' benefits are protected."

The insurance firm said the transaction involved two groups of retirees, one is salaried and the other is non-union hourly. The company added that for 11,000 salaried retirees, both of them providing 50 percent of the monthly benefits each. While MassMutual would be the lead administrator, MetLife would pay its portion of the benefits through an administration agreement with MassMutual.

As far as non-union hourly group, MetLife would be the exclusive provider for making payments directly to the retirees.

The transaction is expected to close later in the current year subject to customary conditions. The company added that it would be executed with a combination of cash and assets-in-kind. The insurer added that PPG will purchase group annuity contracts from MetLife and MassMutual. In turn, the insurance firms would assume responsibility for making benefit payments to the retirees or their survivors covered by the agreement.