IBM said the IBM Personal Pension Plan entered into a non-participating single premium group annuity contract with Prudential to transfer about $6 billion of defined benefit pension obligations for certain pension benefits that began to be paid before 2016.

1. 01

   IBM said the IBM Personal Pension Plan entered into a non-participating single premium group annuity contract with Prudential to transfer about $6 billion of defined benefit pension obligations for certain pension benefits that began to be paid before 2016.

2. 02

   The company said the group annuity contract purchase closed on September 11, 2024, covers about 32,000 participants and beneficiaries, and that Prudential is solely responsible for paying pension benefits due on and after January 1, 2025.

3. 03

   The company expects to recognize a one-time, non-cash pre-tax pension settlement charge of about $2.7 billion ($2.0 billion net of tax) in Q3 2024, and said the actual amount will depend on finalization of actuarial and other assumptions.

4. 04

   The company said the purchase was funded directly from Plan assets and required no cash contribution from the company, and that the charge will not affect Q3 2024 or full-year operating (non-GAAP) profit or free cash flow.

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