J.C. Penney to reduce pension obligation

J. C. Penney says it will reduce its US$5 billion pension benefit obligation by up to 35% without requiring any cash contributions from the company.

The retailer has recently completed a lump-sum offer for select participants in its pension plan and also entered into an agreement with Prudential to purchase a group annuity contract that will settle a substantial portion of the company’s remaining retiree pension benefit obligations.

“These actions not only continue to provide excellent benefit security for our retirees, but also further the company’s objective of de-risking the plan while improving the company’s long-term risk profile,” says J.C. Penney CFO Ed Record.

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