Chemtura Corporation Signs Agreement to Purchase Pension Group Annuity Contract
PHILADELPHIA, Feb. 22, 2016 (GLOBE NEWSWIRE) -- Chemtura Corporation (NYSE: CHMT) (EURONEXT:CHMT) announced that, in accordance with the selection made by Evercore Trust Company, N.A. ("Evercore Trust"), the independent fiduciary for the Chemtura Corporation Retirement Plan (the "Plan"), it has entered into a purchase agreement with Voya Retirement Insurance and Annuity Company ("Voya"), a member of the Voya Financial, Inc. (NYSE: VOYA) family of companies, for a group annuity contract that will transfer payment responsibility to Voya for retirement pension benefits owed to approximately 5,000 Chemtura retirees in the U.S. (who are receiving monthly payments from the Plan as of September 1, 2015 and whose pension benefits were less than $2,000 per month) or their designated beneficiaries.
Starting May 1, 2016, Voya will begin making benefit payments to the affected retirees along with providing administrative services. Retirees will continue to receive the same monthly benefit they were receiving from the Plan. By irrevocably transferring the obligations to Voya, Chemtura will partially mitigate the Company's financial exposure to its defined benefit pension plans and estimates a reduction in its overall projected pension benefit obligation in the range of $350 million to $375 million, based on the valuation date of February 17, 2016. The annuity purchase price will be funded directly by the assets of the Plan.
Chemtura expects to make a cash contribution to the Plan in the first quarter of 2016 of between $30 million and $40 million in order to maintain the Plan's funded status. The Company expects to incur a non-cash pension settlement charge in the range of $150 million to $170 million before tax during the first quarter of 2016 in connection with this group annuity purchase.
The retirees whose benefits are included in this transaction will receive personalized communications with more details by February 29, 2016 including call center information should they have any questions.
Willis Towers Watson served as strategic advisor to Chemtura in this transaction.
This press release contains forward-looking statements based on management's current expectations, estimates and projections. All statements that address expectations or projections about the future, including the expected benefits of the pension annuity contracts, anticipated contributions to the Plan and expected charges related to the pension annuity contracts are forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, potentially inaccurate assumptions and other factors, some of which are beyond our control and difficult to predict. If known or unknown risks materialize, or should underlying assumptions prove inaccurate, our actual results could differ materially from past results and from those expressed in forward-looking statements. Important factors that could cause our results to differ materially from those expressed in forward-looking statements include, but are not limited to, economic, business, competitive, political, regulatory, legal and governmental conditions in the countries and regions in which we operate. These factors are discussed more fully in the reports we file with the Securities and Exchange Commission, particularly our latest annual report on Form 10-K. We assume no obligation to provide revisions to any forward-looking statements should circumstances change, except as otherwise required by securities and other applicable laws.
Chemtura Corporation, with 2015 sales of $1.7 billion, is a global manufacturer and marketer of specialty chemicals. Additional information concerning Chemtura is available at www.chemtura.com.