Crown Holdings, Inc. announced that it has entered into an agreement to purchase a group annuity contract from Massachusetts Mutual Life Insurance Company (MassMutual) to fully guarantee benefits covered under the contract for nearly all of the retirees and deferred vested participants in its primary US defined benefit plans. 

The transaction provides a policy which covers the benefits for approximately 12,000 participants.

“We are carefully moving portions of our pension obligations to MassMutual, a highly rated and experienced insurance and retirement benefits provider,” said Kevin Clothier, Senior Vice President and Chief Financial Officer.

“Upon completion of the transfer, Crown will eliminate approximately $740 million in both US pension plan assets and liabilities. When combined with previous buy-outs in Canada and the UK, the Company will have annuitized approximately $4 billion of pension liabilities since 2021. This transaction further strengthens Crown’s balance sheet, significantly reduces future earnings and cash flow risk, and maintains secure benefits for our pension plan participants.”

MassMutual will make payments to participants starting November 1, 2024. Benefits payable to the retirees and other plan participants will not be affected by the transaction.

The Company expects to contribute approximately $100 million to the plan and to record a one-time non-cash charge of approximately $450 million ($340 million after tax) in the third quarter of 2024 as a part of the plan settlement. The Company reaffirms its previously provided 2024 full year adjusted free cash flow guidance of at least $750 million.