Automotive Supplier Signs Pension Buyout Deal with MetLife

MetLife Inc. announced it has signed an agreement with TRW Automotive, a subsidiary of TRW Automotive Holdings Corp, for MetLife to provide pension benefits to 7,045 retirees and current beneficiaries in TRW’s defined benefit plan.

The $440 million transaction follows TRW’s announcement last month that the company had entered into a partial buy-out agreement with Legal & General Assurance Society related to £2.5 billion ($3.9 billion) of its U.K. pension scheme. Both transactions are part of TRW’s overall plan to reduce its pension liabilities in the U.K., U.S. and Canada.

TRW purchased a group annuity contract from MetLife, which will take over pension payments to the retirees and beneficiaries covered by the agreement. The transaction maintains the amount of the monthly pension benefit received by covered retirees and surviving beneficiaries.

“The buy-out with TRW is one of several MetLife has closed over the last few months,” says Wayne Daniel, senior vice president, U.S. Pensions, MetLife. “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. The number of deals we have closed this year and last year, as well as our consistently robust new business pipeline, suggests plans sponsors are not just considering but beginning to take action when it comes to reducing their pension risk.”