TRW SIGNS PENSION BUYOUT AGREEMENT WITH METLIFE
New York, December 16, 2014
MetLife Inc. (NYSE: MET) announced today that the company has signed an agreement with TRW, a subsidiary of TRW Automotive Holdings Corp (NYSE: TRW) for MetLife to provide pension benefits to 7,045 retirees and current beneficiaries in TRW’s defined benefit plan in a $440 million transaction.
“MetLife is pleased to be working with TRW on this transaction,” says Wayne Daniel, Senior Vice President, U.S. Pensions, MetLife. “Our expertise in managing transferred pension liabilities allows our clients to do what they do best - focus on their core business - while feeling secure that their risks are well managed and their retirees’ and beneficiaries’ pensions are protected. Our goal is to create value for TRW’s shareholders by enabling TRW to reduce the risk and volatility associated with managing their pension plan.”
This transaction follows TRW’s announcement last month that the company had entered into a partial buy-out agreement with Legal & General Assurance Society related to £2.5 billion ($3.9 billion) of their U.K. pension scheme. Both transactions are part of TRW’s overall plan to reduce its pension liabilities in the U.K., U.S. and Canada.
For this U.S. transaction, TRW purchased a group annuity contract from MetLife; as a result, the insurance company will take over pension payments to the retirees and beneficiaries covered by the agreement. The transaction maintains the amount of the monthly pension benefit received by covered retirees and surviving beneficiaries. MetLife, rather than TRW, is responsible for making these monthly payments following the close of the transaction; no action is needed by the retiree/beneficiary.
“The buy-out with TRW is one of several MetLife has closed over the last few months,” said Daniel. “Nearly a third of plan sponsors are considering pension risk mitigation transactions in the next two years according to a poll MetLife recently conducted among plan sponsors1. The number of deals we have closed this year and last year, as well as our consistently robust new business pipeline, suggests plans sponsors are not just considering but beginning to take action when it comes to reducing their pension risk.”
With 2013 sales of $17.4 billion, TRW Automotive ranks among the world's leading automotive suppliers. Headquartered in Livonia, Michigan, USA, the Company, through its subsidiaries, operates in 24 countries and employs approximately 65,000 people worldwide. TRW Automotive products include integrated vehicle control and driver assist systems, braking systems, steering systems, suspension systems, occupant safety systems (seat belts and airbags), electronics, engine components, fastening systems and aftermarket replacement parts and services. All references to "TRW Automotive", "TRW" or the "Company" in this press release refer to TRW Automotive Holdings Corp. and its subsidiaries, unless otherwise indicated. TRW Automotive news is available on the internet at www.trw.com.
MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates (“MetLife”), is one of the largest life insurance companies in the world. Founded in 1868, MetLife is a global provider of life insurance, annuities, employee benefits and asset management. Serving approximately 100 million customers, MetLife has operations in nearly 50 countries and holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit www.metlife.com.
1The Pension Risk Transfer Poll was fielded between September 23 and October 6, 2014 among defined benefit (DB) plan sponsors from Fortune 1000TM companies, as well as the next largest 2,000 companies by DB plan asset size. There were 228 respondents.