SPX Corp announced that it has agreed to transfer its obligations for monthly pension payments for current retirees under the SPX US Pension Plan to Massachusetts Mutual Life Insurance and it also intends to offer a voluntary lump sum payment option to most former SPX employees who are entitled to a future pension benefit from the plan. These two actions, when completed, are expected to reduce SPX's U.S. qualified pension obligations by approximately $800M, or 75%. Approximately 16,000 retirees will begin receiving their pension payments from Massachusetts Mutual Life Insurance, which will take over the monthly pension payments in April 2014. Additionally, the company intends to offer about 7,500 eligible former employees a voluntary single lump sum payment option in lieu of a future pension benefit under the plan during a designated election period in Q1. In conjunction with these actions, the company also intends to change to mark-to-market accounting for pension and post retiree medical plans. Under this approach, the company will be required to revise prior period financial results to reflect the impact of the change to mark-to-market accounting. As a result of these actions and the change to mark-to-market accounting, and based on the current economic environment, the company anticipates recording a net, non-cash credit in Q4 and plans to exclude this credit from its adjusted EPS calculation. Going forward, annual service costs on the company's remaining pension obligations are expected to remain near the 2013 estimated level and the plan contributions are expected to be immaterial to the company's annual operating cash flows.
- Retirement Benefits