NEW YORK--(BUSINESS WIRE)--Bristol-Myers Squibb Company (NYSE:BMY) today announced it will settle $1.4 billion in pension obligations through the purchase of a group annuity contract from The Prudential Insurance Company of America (Prudential) (NYSE:PRU) for approximately 8,000 U.S. retirees and their beneficiaries who started receiving their monthly retirement benefit payments on or before June 1, 2014. Bristol-Myers Squibb’s U.S. Retirement Plan (“the Plan”) is in a strong financial position, and the obligations associated with this transaction will require no additional cash contributions by the company. There will be no change to the monthly retirement benefit payments currently received by retirees and their beneficiaries. All other plan participants will stay in the company’s Plan, which is well-funded to ensure benefit payments to future retirees and beneficiaries.
The transaction reduces risk in the Plan and better manages the ongoing variations in cost associated with its maintenance while entrusting current retirees and their beneficiaries’ pensions to a financial institution with expertise in the long-term management of retirement benefits.
Bristol-Myers Squibb is committed to the long-term financial health of the Plan and has taken steps to protect all participants of the Plan. As part of this transaction, the company’s Pension Committee engaged Fiduciary Counselors Inc., a leading independent fiduciary services firm, to represent the Plan and all of its participants and their beneficiaries, including those remaining in the Plan, to objectively select the safest available annuity as defined by the U.S. Department of Labor standards. Fiduciary Counselors selected a Prudential contract that provides an additional safeguard by segregating assets in a separate account dedicated to the payment of benefits to plan retirees and their beneficiaries.
All other participants and their beneficiaries in the company’s Plan with accrued benefits will remain in the current Plan, including retirees who participate in collectively bargained plans or the Puerto Rico plan as well as certain retirees with variable benefit payments. The transfer to Prudential is expected to occur in December 2014 and is subject to satisfaction of closing conditions. Upon completion of the transfer, Prudential will assume full financial responsibility for making the annuity payments provided under the group annuity contract.
Retirees and beneficiaries who will transfer to Prudential will be receiving individualized information packages with further details and answers to frequently asked questions.
About Bristol-Myers Squibb
Bristol-Myers Squibb is a global biopharmaceutical company whose mission is to discover, develop and deliver innovative medicines that help patients prevail over serious diseases. For more information, please visit www.bms.com or follow us on Twitter at http://twitter.com/bmsnews.
Prudential Retirement delivers retirement plan solutions for public, private, and non-profit organizations. Services include defined contribution, defined benefit and non-qualified deferred compensation record keeping, administrative services, investment management, comprehensive employee education and communications, and trustee services, as well as a variety of products and strategies, including institutional investment and income products, pension risk transfer solutions and structured settlement services. With over 85 years of retirement experience, Prudential Retirement helps meet the needs of over 4.0 million participants and annuitants. Prudential Retirement has $330.5 billion in retirement account values as of June 30, 2014.
Prudential Financial, Inc. (NYSE:PRU), a financial services leader with more than $1.1 trillion of assets under management as of June 30, 2014, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. In the U.S., Prudential’s iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit www.news.prudential.com.
Retirement products and services are provided by Prudential Retirement Insurance and Annuity Company (PRIAC), Hartford, CT, or its affiliates.) Insurance products are issued by The Prudential Insurance Company of America (PICA), Newark, NJ, a Prudential Financial company solely responsible for its financial condition and contractual obligations.
Bristol-Myers Squibb Forward-Looking Statement
This press release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations. No forward-looking statement can be guaranteed. Among other risks, there is no guarantee that the transaction will occur on the terms or within the time frame described in this release. Forward-looking statements in this press release should be evaluated together with the many risks and uncertainties that affect Bristol-Myers Squibb's business, including those identified in Bristol-Myers Squibb's Annual Report on Form 10-K for the year ended December 31, 2013, in our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. Bristol- Myers Squibb undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.