Kroger Co. disclosed in a filing Monday that it will contribute up to $1 billion to pension plan, which it believes the "significantly" address the underfunded position of the plan. The supermarket chain said it plans to fund the contribution by issuing debt. The said certain participants' benefit balances will be distributed out of the plan, by way of a transfer to other qualified retirement plan options or a lump-sum payout. The company expects a one-time expense in 2017 related to the settlement of obligations, which is not currently contemplated in its earnings guidance. "We believe a contribution to the plan and payout to participants at this time are strategic opportunities based on the current interest rate environment, the potential future changes to the U.S. tax code, and scheduled Pension Benefit Guaranty Corporation fee increases," the company stated in the filing. The stock, which eased 0.2% in premarket trade, has plunged 33% year to date, while the S&P 500 has gained 9.9%.
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