JC Penney has completed a transfer of pension risk to annuities provider Athene Holdings that ensures the bankrupt retailer’s retired employees will continue to receive their benefits.
Under the terms of the deal, JC Penney transferred $2.8 billion in pension obligations for roughly 30,000 participants in its pension plan to Athene, which agreed to provide annuity benefits to those participants.
The deal completes the termination of JC Penney’s plan as it prepares to emerge from Chapter 11 bankruptcy.
JC Penney filed for bankruptcy in May 2020 after the COVID-19 pandemic forced it to temporarily close its then nearly 850 stores.
The Pension Benefit Guaranty Corporation took responsibility for the pension plan in November but also allowed the retailer to explore alternatives that would avoid cuts to retiree benefits.
According to November PBGC estimates, the plan was 92% funded with $3.3 billion in assets and $3.6 billion in benefit liabilities.
The company’s most recent 10-K filing in January 2020 indicates that the plan had $3.5 billion in assets and $3.2 billion in liabilities and was 120% funded.