Benzinga | Nov 11, 2021 04:31PM EST

US Steel Reports Purchased Group Annuity Contracts From Banner Life Insurance, William Penn Life Insurance To Transfer ~$284M Of Co. Pension Plan Obligations To Legal & General

United States Steel Corporation (NYSE:X) ("U. S. Steel") today announced it has purchased group annuity contracts from Banner Life Insurance Company and William Penn Life Insurance Company of New York (both subsidiaries of Legal & General America, Inc. and, together, referred to as "Legal & General") to transfer approximately $284 million of the Company's pension plan obligations to Legal & General. The purchase of the group annuity contracts will be funded directly by the assets of the pension plan.

"Legal & General was carefully selected by an independent fiduciary as a highly rated and experienced retirement benefits provider to ensure our retirees' benefits are secured and maintained, a continued priority of our Best for All strategy," said U. S. Steel President and Chief Executive Officer David B. Burritt. "This transaction is yet another meaningful step in strengthening the Company's balance sheet and further de-risking our pension plan, a plan that remains more than 100% funded and is an important source of differentiation versus some peers inthe steel industry."

The purchase results in the transfer of administrative and benefit-paying responsibilities for approximately 17,800 U.S. retirees and beneficiaries to Legal & General. Legal & General will begin paying benefits for certain retirees and beneficiaries in the United States Steel Corporation Plan for Employee Pension Benefits (Revision of 2003) on January 1, 2022. There will be no change to the pension benefits for any retirees and beneficiaries as a result of the transaction. Details will be provided to retirees and beneficiaries whose continuing payments will be fulfilled by Legal & General.

As a result of the transaction, the Company expects to recognize a non-cash pension settlement charge of approximately $110 million, subject to finalization of actuarial assumptions and other applicable adjustments in the fourth quarter of 2021.