Motorola Solutions announced that it will offload the pensionobligations of approximately 30,000 retirees.

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Prudential Insurance Company will assume the responsibility ofmanaging the communication company’s retiree defined benefitpension assets and disbursing monthly payments.

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The group annuity contract with Prudential is the third largesttransaction of its kind. In a statement, Motorola said it expectsto reduce its ongoing pension obligations by $4.2 billion.

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See also: Motorola Solutions plans $1.4 billion bond sale to fundpensions

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“We have substantially reduced the funding volatility associatedwith our pension plans while protecting benefits for retirees,”said Gino Bonanotee, Motorola’s CFO. “Our retirees’ benefits arenot changing, just who provides them.”

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The company said the transaction is expected to be completedthis year, with Prudential issuing benefit payments early in2015.

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More than 5,700 companies have transferred their pension liabilities to Prudential.All told, the company’s retirement division manages the benefits of1.6 million participants.

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“Guaranteeing benefits has been a part of Prudential’s corebusiness for more than 85 years. We look forward to welcoming theseretirees to Prudential and providing them with retirement incomesecurity,” said Phil Waldeck, head of pensions and structuredsolutions for Prudential Retirement.

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In addition to transferring pension obligations of existingretirees, another 32,000 defined benefit participants will beeligible to receive a lump-sum payment of their accrued benefits.The offer will be extended to former Motorola employees who leftthe company before June 30, 2014, and who have not yet startedreceiving benefit payments.

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As a part of the deal, total lump-sum payments will be capped at$1 billion. The smallest lump sums will be the first toqualify.

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Current employees enrolled in Motorola’s defined benefit planwill not be affected by the contract. Only Motorola employees hiredbefore January 1, 2005 are eligible for participation in thecompany’s defined benefit plan.

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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.