Summary
Verizon Communications Inc. (VZ) filed an 8-K on December 10, 2012, disclosing a significant event related to its pension plan. The Verizon Management Pension Plan has purchased a single premium group annuity contract from The Prudential Insurance Company of America for approximately $7.5 billion to settle pension liabilities. This action was taken following a definitive purchase agreement entered into in October 2012. In connection with this transaction, Verizon contributed approximately $2.6 billion to the plan since September 1, 2012. The company expects to record a significant charge in the fourth quarter of 2012 as a result of this annuity purchase and the standard year-end remeasurement of pension assets and liabilities based on updated actuarial assumptions. Investors should note that this information is furnished and not deemed filed, meaning it's for disclosure purposes and doesn't alter previous filings unless explicitly incorporated.
Key Highlights
- 1Verizon's pension plan settled approximately $7.5 billion in pension liabilities by purchasing an annuity contract from Prudential.
- 2The transaction was executed via a definitive purchase agreement dated October 17, 2012.
- 3Verizon contributed approximately $2.6 billion to the pension plan since September 1, 2012, in anticipation of this settlement.
- 4The company anticipates a significant accounting charge in Q4 2012 due to the annuity purchase and year-end pension remeasurement.
- 5This remeasurement will incorporate actual returns on plan assets and updated discount rates.
- 6The disclosure is made under Regulation FD and is furnished, not filed with the SEC.