Motorola Solutions, Inc. (NYSE:MSI) today announced that it has reached
an agreement with The Prudential Insurance Company of America, a
Prudential Financial, Inc. company (NYSE:PRU), under which Prudential
will assume responsibility for the monthly pension benefits for
retirees. Motorola Solutions also will offer eligible U.S. pension plan
participants the opportunity to apply for lump-sum pension payments. In
total, these actions are expected to reduce Motorola Solutions’ ongoing
U.S. pension obligation by $4.2 billion. The company plans to contribute
$1.1 billion in cash to its U.S. pension plans in 2014.
“We have substantially reduced the funding volatility associated with
our pension plans while protecting benefits for retirees,” said Gino
Bonanotte, Motorola Solutions chief financial officer. “Our retirees’
benefits are not changing, just who provides them.”
In the third-largest transaction of its kind, the Motorola Solutions
Pension Plan intends to purchase a group annuity contract from
Prudential under which Prudential will pay and administer future
benefits to the approximately 30,000 retirees who currently receive
payments. The transaction is expected to be completed in 2014, with
Prudential assuming responsibility for making the benefit payments
beginning in early 2015. Prudential is entrusted with managing the
pension benefits of 1.6 million participants at more than 5,700
companies.
In addition, approximately 32,000 pension plan participants will be able
to apply to receive a lump-sum payment of their accrued, vested pension
benefit. To be eligible, participants must have left the company before
June 30, 2014, and accrued a pension benefit but have not yet started
receiving benefit payments. Participants must apply for the opportunity
during the application period of Oct. 2, 2014 to Nov. 7, 2014. Total
lump-sum payments will be capped at $1 billion, with the smallest
amounts qualifying first.
“We are pleased to be selected to help Motorola Solutions continue to
deliver on its pension obligations to retirees while also reducing risk
and volatility for the company,” said Phil Waldeck, senior vice
president and head of Pensions and Structured Solutions for Prudential
Retirement. “Guaranteeing benefits has been a part of Prudential’s core
business for more than 85 years. We look forward to welcoming these
retirees to Prudential and providing them with retirement income
security.”
There are no changes for active employees who participate in the plan.
Motorola offered the pension plans to U.S. employees hired before Jan.
1, 2005, with no additional benefits accrued for participants as of
March 1, 2009.
Affected pension participants will receive detailed mailings regarding
these changes in the following days, with call centers opening next
week. For more information, pension plan participants not yet receiving
payments can call (866) 656-8918 starting Sept. 29, 2014. Retirees
currently receiving pension payments can call (866) 697-0181 starting
Oct. 2, 2014.
Motorola Solutions Investor Conference Call
Investors are invited to listen to a live webcast of the Motorola
Solutions conference call discussing the announcement. The conference
call will be held at 11 a.m. Eastern Daylight Time today. To listen to
the call, visit www.motorolasolutions.com/investor.
Additional information regarding the transaction also will be made
available on the company’s website.
Forward-Looking Statements
Statements in this press release and from Motorola Solutions and
Prudential management about the expected timing, completion and effects
of the closing of the purchase of the group annuity contract from
Prudential and the payment of lump-sum distributions to certain pension
plan participants, and all other statements made in this press release
that are not historical facts, are forward-looking statements and are
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. In some cases, these forward-looking
statements may be identified by the use of words such as “may,” “will,”
“expect,” “plan,” “intend,” “anticipate,” or “believe,” or the negative
of those words or other comparable words. These forward-looking
statements are based on current expectations and assumptions, are not
guarantees of future events or results, and are subject to various risks
and uncertainties, including uncertainties inherent in regulatory
reviews, market conditions and general and international economic
conditions, and other factors that could affect the timing or the
ability of the parties to close the transactions referenced in this
press release. Forward-looking statements included in this press release
or made by management are made as of the date they are made only, and
Motorola Solutions undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law. A detailed
description of other risks, uncertainties and other factors affecting
Motorola Solutions are included in its news releases and filings with
the SEC, including but not limited to the factors under the heading
“Risk Factors” in its Form 10-K for the year-ended Dec. 31, 2013 and
quarterly reports on Form 10-Q for the quarters ended March 29, 2014 and
June 28, 2014.
About Motorola Solutions
Motorola Solutions is a leading provider of mission-critical
communication solutions and services for enterprise and government
customers. Through leading-edge innovation and communications
technology, it is a global leader that enables its customers to be their
best in the moments that matter. Motorola Solutions trades on the New
York Stock Exchange under the ticker “MSI.” To learn more, visit www.motorolasolutions.com.
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About Prudential
Prudential Retirement delivers retirement plan solutions for public,
private, and non-profit organizations. Services include defined
contribution, defined benefit and non-qualified deferred compensation
record keeping, administrative services, investment management,
comprehensive employee education and communications, and trustee
services, as well as a variety of products and strategies, including
institutional investment and income products, pension risk transfer
solutions and structured settlement services. With over 85 years of
retirement experience, Prudential Retirement helps meet the needs of
over 4 million participants and annuitants. Prudential Retirement has
$330.5 billion in retirement account values as of June 30, 2014.
Prudential Financial, Inc. (NYSE:PRU), a financial services leader with
more than $1.1 trillion of assets under management as of June 30, 2014,
has operations in the United States, Asia, Europe, and Latin America.
Prudential’s diverse and talented employees are committed to helping
individual and institutional customers grow and protect their wealth
through a variety of products and services, including life insurance,
annuities, retirement-related services, mutual funds and investment
management. In the U.S., Prudential’s iconic Rock symbol has stood for
strength, stability, expertise and innovation for more than a century.
For more information, please visit www.news.prudential.com.
Retirement products and services are provided by Prudential Retirement
Insurance and Annuity Company (PRIAC), Hartford, Conn., or its
affiliates. Insurance products are issued by The Prudential Insurance
Company of America (PICA), Newark, N.J., a Prudential Financial company
solely responsible for its financial condition and contractual
obligations.
0267697-00001-00
MOTOROLA, MOTOROLA SOLUTIONS and the Stylized M Logo are trademarks or
registered trademarks of Motorola Trademark Holdings, LLC and are used
under license. All other trademarks are the property of their respective
owners. ©2014 Motorola Solutions, Inc. All rights reserved.
Copyright Business Wire 2014