Unisys Transfers a Portion of its U.S. Defined Benefit Pension Obligations to F&G Through a nearly $265 Million Annuity Contract

Rhea-AI Summary

Unisys Corporation (NYSE: UIS) has finalized an agreement with F&G Annuities & Life, Inc. (NYSE: FG) to purchase group annuity contracts valued at approximately $265 million. This deal will allow Unisys to transfer projected pension benefit obligations for about 8,650 retirees to F&G, facilitating a significant reduction in pension liabilities on its balance sheet.

The transaction will incur a one-time, non-cash, pre-tax settlement charge of $193 million, but will not affect the company's cash position. Since 2020, Unisys has removed over $1 billion in U.S. defined benefit obligations.

Positive

• Transfer of projected pension obligations totaling approximately $265 million.
• Reduction of pension liabilities from balance sheet by over $1 billion since 2020.
• No cash impact as the purchase is made by the pension trust.

Negative

• One-time, non-cash, pre-tax settlement charge of approximately $193 million.

News Market Reaction – UIS

+2.38%

+2.38% Session move

In the trading session that priced this news, UIS gained 2.38%, reflecting a moderate positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

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This agreement marks the third U.S. retiree buyout since 2021 and reflects continuation of efforts to reduce pension liabilities, volatility and cost while securing retiree pension benefits with highly-rated insurance companies

BLUE BELL, Pa., March 23, 2023 /PRNewswire/ -- Unisys Corporation (NYSE: UIS) today announced it has closed agreements with F&G Annuities & Life, Inc. (NYSE: FG) ("F&G") to purchase group annuity contracts totaling approximately $265 million through which Unisys will transfer projected benefit obligations valued slightly less than this amount related to certain retirees under one of the company's U.S. pension plans to F&G.

Unisys anticipates that this action will result in a one-time, non-cash, pre-tax settlement charge of approximately $193 million. Because the purchase will be made by the pension trust, there will be no impact on the company's cash position.

This action brings the value of U.S. defined benefit pension obligations removed from the company's balance sheet since 2020 to over $1 billion and global pension obligations to over $1.7 billion.

"Purchasing these annuity contracts demonstrates the company's continued commitment to de-risking its pension obligations," said Unisys Chief Financial Officer Deb McCann.

As part of the transfer, F&G's insurance subsidiaries, Fidelity & Guaranty Life Insurance Company and Fidelity & Guaranty Life Insurance Company of New York, will assume responsibility for pension benefits for approximately 8,650 retirees and beneficiaries with monthly benefits lower than certain thresholds. There will be no changes to the gross amount, timing, or form of the monthly pension payments. 

About Unisys
Unisys is a global technology solutions company that powers breakthroughs for the world's leading organizations. Our solutions – digital workplace; cloud, applications & infrastructure; enterprise computing; and business process – help our clients challenge the status quo and create new possibilities. To learn how we deliver breakthroughs for our clients, visit unisys.com.

Follow Unisys on Twitter and LinkedIn.

About F&G
F&G Annuities & Life, Inc. is committed to helping Americans turn their aspirations into reality. F&G is a leading provider of insurance solutions serving retail annuity and life customers and institutional clients and is headquartered in Des Moines, Iowa.

Forward-Looking Statements
Any statements contained in this release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements rely on assumptions and are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Additional discussion of factors that could affect Unisys future results is contained in our periodic filings with the Securities and Exchange Commission.

RELEASE NO.: 0323/9902

Unisys and other Unisys products and services mentioned herein, as well as their respective logos, are trademarks or registered trademarks of Unisys Corporation. Any other brand or product referenced herein is acknowledged to be a trademark or registered trademark of its respective holder.

UIS-C

View original content:https://www.prnewswire.com/news-releases/unisys-transfers-a-portion-of-its-us-defined-benefit-pension-obligations-to-fg-through-a-nearly-265-million-annuity-contract-301780084.html

SOURCE Unisys Corporation

FAQ

What is the value of the annuity contracts Unisys purchased from F&G?

The annuity contracts are valued at approximately $265 million.

How much has Unisys reduced its pension obligations since 2020?

Unisys has reduced its U.S. defined benefit pension obligations by over $1 billion since 2020.

What will be the financial impact of the agreement on Unisys?

Unisys will incur a one-time, non-cash, pre-tax settlement charge of approximately $193 million.

How many retirees will benefit from the transfer to F&G?

Approximately 8,650 retirees will have their pension benefits transferred to F&G.

Will there be any changes to the pension payments for retirees?

There will be no changes to the gross amount, timing, or form of the monthly pension payments.