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Athene to take over $2.8 billion in J.C. Penney pension obligations By Reuters 

© Reuters. A JC Penney retailer is proven in Oceanside

By Joshua Franklin

(Reuters) – J.C. Penney Co Inc mentioned on Thursday it has agreed to switch its pension obligations to annuities supplier Athene Holding (NYSE:) Ltd, making certain that the U.S. division retailer chain’s retired staff will proceed to get their advantages.

J.C. Penney, which mentioned in December that it will search to exit chapter safety someday this 12 months, won’t obtain any cash as a part of the deal, however will shed the liabilities that got here with the pensions.

“We’re thrilled that this one-of-a-kind transaction will allow the Pension Plan to pay the advantages that JCPenney supposed the individuals to obtain,” J.C. Penny mentioned in an emailed assertion.

Apollo International Administration (NYSE:) Inc, the personal fairness agency that controls Athene and earlier this month inked an $11 billion deal to take it personal, is in search of to revenue by incomes a better return on investing the pension property than its payouts to the retirees shall be.

It’s Athene’s greatest ever pension switch deal.

Underneath the phrases of the deal, J.C. Penney Co Inc has agreed to switch $2.8 billion in pension obligations for roughly 30,000 individuals in J.C. Penney’s pension plan, based on individuals acquainted with the matter.

In a pension danger switch, an insurer takes on a pension plan’s property and liabilities, and writes a gaggle annuity contract obligating it to pay individuals. The insurer is betting it’ll make extra on investments than it pays out.

The Pension Profit Warranty Company (PBGC) in November had taken accountability for J.C. Penney’s pension plan, but in addition allowed the retailer to discover options that will keep away from cuts to retiree advantages.

J.C. Penney filed for chapter in Could 2020 after the COVID-19 pandemic pressured it to quickly shut its then practically 850 shops.

The 118-year-old division retailer chain mentioned in December it will exit Chapter 11 after agreeing to a take care of two of its greatest landlords, Simon Property Group (NYSE:) and Brookfield Asset Administration Inc.

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