US-based MetLife has entered into an agreement with TRW Automotive Holdings subsidiary TRW to provide pension benefits to 7,045 retirees and current beneficiaries in its defined benefit plan, in a $440m deal.
The transaction is in line with TRW’s announcement last month, where the company had signed a partial buy-out agreement with Legal & General Assurance Society related to £2.5bn ($3.9bn) of their UK pension scheme.
MetLife US pensions senior vice-president Wayne Daniel said: "Our expertise in managing transferred pension liabilities allows our clients to do what they do best – focus on their core business – while feeling secure that their risks are well managed and their retirees’ and beneficiaries’ pensions are protected.
"Our goal is to create value for TRW’s shareholders by enabling TRW to reduce the risk and volatility associated with managing their pension plan."
For this US transaction, TRW purchased a group annuity contract from MetLife to allow the insurance company to take over pension payments to the retirees and beneficiaries covered by the agreement.
Further, TRW has signed both deals as part of its overall plan to reduce its pension liabilities in the UK, US, and Canada.
Daniel added: "Nearly a third of plan sponsors are considering pension risk mitigation transactions in the next two years according to a poll MetLife recently conducted among plan sponsors."
Based in Livonia of Michigan, US, TRW Automotive produces products such as integrated vehicle control and driver assist systems, braking systems, steering systems, suspension systems, occupant safety systems and aftermarket replacement parts and services.
Established in 1868, MetLife provides life insurance, annuities, employee benefits and asset management services.
Image: MetLife has signed an agreement to provide pension benefits to TRW’s retirees and current beneficiaries. Photo: courtesy of Stuart Miles/ FreeDigitalPhotos.net.