April 3 (Reuters) - Aluminum producer Alcoa Corp said on Tuesday it had signed contracts to transfer Canadian pension obligations and assets worth $555 million to three insurers, in a move to strengthen its balance sheet.
Alcoa expects to incur a non-cash settlement charge of about $175 million in the second quarter of 2018, due to these annuity transactions.
The contracts with Canadian insurance companies will cover about 2,100 retirees or beneficiaries. The insurers will begin making benefit payments to the affected plan participants by July 2018.
As part of the contracts, Alcoa will contribute about $95 million in mid-April 2018 to facilitate the annuity transaction. (Reporting by Sanjana Shivdas in Bengaluru; Editing by Shounak Dasgupta)