Hartford Deal To Cut Pension Liabilities By $1.6 Billion Will Result In $485 Million Charge

Hartford Financial Services said Monday has reduced its pension liabilities by $1.6 billion through a deal with Prudential Financial Inc. . That represents 29% of the $5.6 billion in the insurer's U.S. qualified pension plan liabilities. As a result of the transfer of liabilities, Hartford will take a $485 million pension settlement charge in the second quarter, and shareholder equity will be reduced by $140 million, or 37 cents a share. The company plans to contribute $300 million by year-end 2017 to maintain the pension plan's pre-transaction-funded status. The company said there will be no change to the pension benefits for any plan participants as a result of the deal, which is expected to occur on June 30. "We are pleased that this transaction preserves these pension benefits while reducing the company's long-term pension obligations," said Hartford's Chief Human Resources Officer Marty Gervasi. The stock, which is still inactive in premarket trade, has gained 8.0% year to date, while Prudential shares have slipped 0.7% and the S&P 500 has gained 8.9%.