MetLife, TRW Sign $440 Million Pension Buyout Agreement

   By Angela Chen 
 

MetLife Inc. (MET) on Tuesday said it will provide pension benefits for the beneficiaries of a TRW Automotive Holdings Corp. unit in a $440 million deal that is the latest in a number of high-profile pension shifts to insurers.

Car-parts maker TRW bought a group annuity contract from MetLife, which will now take over pension payments to the 7,045 U.S. retirees and beneficiaries who are covered. The transaction maintains the existing amount of the benefits.

"The buyout with TRW is one of several MetLife has closed over the last few months," said Wayne Daniel, senior vice president of U.S. pensions for MetLife.

Such buyouts are becoming increasingly common. In recent months, Prudential Financial Inc. (PRU) reached two separate deals with Motorola Solutions Inc. (MSI) and Bristol-Myers Squibb Co. (BMY) to shift a combined $4.5 billion in pension obligations to the insurer. The arrangements represent one of the most-promising growth areas for major life insurers.

TRW last month agreed to transfer about $4 billion of its U.K. pension liabilities to a unit of life insurer Legal & General Group PLC (LGEN.LN). TRW is in the process of being acquired by ZF Friedrichshafen in a deal that will create the world's second-largest automotive supplier by sales.

Last week, MetLife said its board approved another $1 billion repurchase of its stock, as the company expects to be named "systemically important" by a new panel of federal regulators and therefore potentially subject to stiff but yet-to-be-determined capital rules.

Write to Angela Chen at [e-mail]

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