PotlatchDeltic Transfers $70 Million in Pension Obligations

Rhea-AI Summary

PotlatchDeltic Corporation (Nasdaq: PCH) announced an agreement to purchase a $70 million group annuity contract from American General Life Insurance Company. This transaction, effective June 1, 2022, allows American General Life to manage pension obligations for select retirees. Funded with plan assets, the company transfers the premium amount on March 17, 2022. The pension plan will remain well-funded, and benefits for participants will not change. PotlatchDeltic will incur a noncash pension settlement charge in Q1 2022, enhancing its balance sheet by reducing exposure to pension liability volatility.

Positive

• Enhances balance sheet and reduces pension liability risk.
• Transfer represents nearly 25% of qualified pension liability.

Negative

• Noncash pension settlement charge will impact Q1 2022 earnings.

SPOKANE, Wash.--(BUSINESS WIRE)-- PotlatchDeltic Corporation (Nasdaq: PCH) today announced that it agreed to purchase a group annuity contract from American General Life Insurance Company (“American General Life”), pursuant to which it will irrevocably transfer to American General Life approximately $70 million of pension obligations. American General Life will assume responsibility for annuity administration and benefit payments to select retirees and terminated vested participants (“participants”) beginning June 1, 2022. Participants and beneficiaries covered by this transaction will receive personalized information with further details before June 1, 2022.

This transaction was funded with plan assets and the Company transferred the premium amount to American General Life on March 17, 2022. There will be no change to participants’ pension benefits as a result of the group annuity transaction. Following the annuity purchase and transfer, the Company’s qualified pension plan will remain well-funded.

PotlatchDeltic will recognize a pre-tax noncash pension settlement charge in the first quarter of 2022.

“This transaction further enhances PotlatchDeltic’s strong balance sheet, reduces the risk from volatility in pension plan obligations and maintains financially secure benefits for our pension plan participants,” said Jerald W. Richards, vice president and chief financial officer. “The transfer represents almost one quarter of our qualified pension liability.”

ABOUT POTLATCHDELTIC

PotlatchDeltic (Nasdaq: PCH) is a leading Real Estate Investment Trust (REIT) that owns approximately 1.8 million acres of timberlands in Alabama, Arkansas, Idaho, Louisiana, Minnesota and Mississippi. Through its taxable REIT subsidiary, the company also operates six sawmills, an industrial-grade plywood mill, a residential and commercial real estate development business and a rural timberland sales program. PotlatchDeltic, a leader in sustainable forest practices, is committed to environmental and social responsibility and to responsible governance. More information can be found at www.potlatchdeltic.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220317005792/en/

(Investors)

Jerry Richards

509-835-1521

(Media)

Anna Torma

509-835-1558

Source: PotlatchDeltic

FAQ

What is the significance of PotlatchDeltic's $70 million annuity purchase?

It reduces pension liability risk and enhances the company's balance sheet.

When will the pension obligations transfer to American General Life?

The transfer will take effect on June 1, 2022.

How will the annuity purchase affect PotlatchDeltic's pension plan participants?

Participants will see no change in their pension benefits.

What financial impact will the annuity purchase have on PotlatchDeltic?

The company will recognize a noncash pension settlement charge in Q1 2022.

How much of the pension liability is being transferred to American General Life?

Almost 25% of the qualified pension liability is being transferred.