(Adds details from statement)
Oct 6 United Technologies Corp, maker of
Pratt & Whitney engines, said on Thursday it would cut the
overall size of its pension liabilities by about $1.77 billion
The company, which also makes Otis elevators, said it
expected to incur a one-time pre-tax pension settlement charge
of $400 million to $530 million in the fourth quarter.
United Technologies had future pension and post-retirement
benefit obligations of $5.71 billion as of June 30.
The company said in a statement it would transfer management
of its pension plans for about 36,000 retirees to a third-party
as well as offer lump sum buyouts instead of monthly pension
payments to an estimated 10,000 retirees.
The company will transfer about $775 million of its
outstanding pension benefit obligations to the Prudential
Insurance Company of America, United Technologies said.
Prudential will administer retirement benefits for United
Technologies retirees and surviving beneficiaries who currently
receive a benefit of $300 per month or less from the plans.
The transfer to Prudential is expected to close on Oct. 12,
according to the statement.
United Technologies will also offer retirees a one-time lump
sum payment instead of future monthly payments, which it
estimated would reduce pension benefit obligations by about $995
million by end of 2016.
(Reporting by Rachit Vats in Bengaluru; Editing by Richard