Following a continuing trend to de-risk from pension liabilities, Denver-based Molson Coors Brewing Co. has purchased a group annuity contract from Athene Annuity and Life Co. that will transfer about $900 million in pension liabilities away from the brewer.
As of December 31, the MillerCoors LLC Pension Plan had $2.8 billion in assets, according to the Molson Coors subsidiary’s most recent Form 5500 filing.
Under the agreement, Athene will issue a group annuity contract to MillerCoors and individual annuity certificates to applicable retirees and beneficiaries. AAIA will have direct payment responsibility for all the liabilities covered in this transaction.
Pensions & Investments reports that as of May 1, 2018, Athene will begin making benefit payments as a result of the deal.
About 6,000 retirees and beneficiaries in the MillerCoors LLC Pension Plan will be the recipients, the report said, and an Athene news release adds that the company will also provide ongoing administrative services. Retirees and beneficiaries will receive the same monthly benefit they were previously receiving from the plan.
In August, P&I reported that in a recently filed 10-Q, Molson Coors “expects to contribute between $300 million and $320 million total to its global pension plans in 2017.”
As of December 31, the company had $5.9 billion in global defined benefit assets and $6.2 billion in benefit obligations for a funded status of 95.2 percent, according to its most recent 10-K.
As of the same date, the global DB plans had an aggregate asset allocation of 62.7 percent fixed income (compared with a 65.9 percent target), 24.4 percent equities (23.7 percent), 8.9 percent other (6.4 percent), 2.2 percent real estate (2.2 percent) and 1.8 percent hedge funds (1.8 percent).
No information was available at the time on U.S. DB plan assets or obligations.