(Reuters) – IBM Inc said on Wednesday it expects a pretax charge of about $2.7 billion in the third quarter related to a transaction to transfer some of its pension plan liabilities to Prudential Financial Inc.
The transaction will transfer approximately $6 billion of IBM's defined benefit pension obligations to Prudential Insurance Company.
Defined benefit pension plans guarantee specific payments upon an employee's retirement, paid entirely by the employer, with no contributions from the employee.
IBM said the one-time non-cash charge will not affect its adjusted operating profit or free cash flow for the third quarter or full year 2024.
The agreement stipulates that starting next year, Prudential will assume full responsibility for paying pension benefits to the approximately 32,000 members of IBM's plan.
(Reporting by Juby Babu in Mexico City and Harshita Mary Varghese in Bengaluru; Editing by Alan Barona)
