Bristol-Myers Squibb To Settle $1.4B In Pension Obligations To Prudential

Proquest LLC

Bristol-Myers Squibb Company reported it will settle $1.4 billion in pension obligations through the purchase of a group annuity contract from The Prudential Insurance Company of America for approximately 8,000 U.S. retirees and their beneficiaries who started receiving their monthly retirement benefit payments on or before June 1.

According to a media release, Bristol-Myers Squibb's U.S. Retirement Plan is in a strong financial position, and the obligations associated with this transaction will require no additional cash contributions by the company. There will be no change to the monthly retirement benefit payments currently received by retirees and their beneficiaries. All other plan participants will stay in the company's Plan, which is well-funded to ensure benefit payments to future retirees and beneficiaries.

The transaction reduces risk in the Plan and better manages the ongoing variations in cost associated with its maintenance while entrusting current retirees and their beneficiaries' pensions to a financial institution with expertise in the long-term management of retirement benefits.

Bristol-Myers Squibb is committed to the long-term financial health of the Plan and has taken steps to protect all participants of the Plan. As part of this transaction, the company's Pension Committee engaged Fiduciary Counselors to represent the Plan and all of its participants and their beneficiaries, including those remaining in the Plan, to objectively select the safest available annuity as defined by the U.S. Department of Labor standards. Fiduciary Counselors selected a Prudential contract that provides an additional safeguard by segregating assets in a separate account dedicated to the payment of benefits to plan retirees and their beneficiaries.

All other participants and their beneficiaries in the company's Plan with accrued benefits will remain in the current Plan, including retirees who participate in collectively bargained plans or the Puerto Rico plan as well as certain retirees with variable benefit payments. The transfer to Prudential is expected to occur in December 2014 and is subject to satisfaction of closing conditions. Upon completion of the transfer, Prudential will assume full financial responsibility for making the annuity payments provided under the group annuity contract.

Retirees and beneficiaries who will transfer to Prudential will be receiving individualized information packages with further details and answers to frequently asked questions.

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