VAN BUREN TOWNSHIP, Mich., July 16, 2014 /PRNewswire/ -- Visteon Corporation (NYSE: VC) today announced that it has entered into an agreement to transfer certain U.S. pension assets to Prudential Insurance Company of America, a subsidiary of Prudential Financial, Inc. (NYSE: PRU), to settle approximately $350 million of Visteon's $1.1 billion in outstanding U.S. pension obligations.
Under the agreement, the Visteon Pension Plan will purchase a group annuity contract from Prudential, which will then assume the obligation to make future annuity payments to certain Visteon hourly retirees.
The transaction is designed to further Visteon's objective of reducing risk in the pension plan and better managing the ongoing cost volatility of such plans, while continuing to meet its obligation to all current participants. The annuity purchase requires no immediate cash contribution from the company and will be funded by existing plan assets.
The pension transfer will not change the amount of the monthly pension benefit received by affected retirees and surviving beneficiaries. The group annuity contract includes an irrevocable commitment by Prudential to make annuity payments to affected retirees covered under the contract.
Towers Watson acted as the company's consultant for this transaction. Fiduciary Counselors Inc. served as an independent fiduciary in the selection process.
Visteon is a global automotive supplier delivering value for vehicle manufacturers and shareholders through two high-growth core businesses: automotive cockpit electronics and thermal management. Visteon owns 70 percent of Halla Visteon Climate Control Corp., the world's second largest provider of vehicle thermal management solutions. Visteon designs, engineers and manufactures innovative components and systems for virtually every vehicle manufacturer worldwide. With corporate offices in Van Buren Township, Mich. (U.S.); Shanghai, China; and Chelmsford, UK; Visteon has facilities in 32 countries and employs about 29,000 people. Visteon had sales of $7.4 billion in 2013. Learn more at www.visteon.com.
SOURCE Visteon Corporation