Albertsons Companies Associates Ratify Agreement with UFCW Local Unions for Variable Annuity Pension Plan

New plan established to safeguard benefits for associates

BOISE, Idaho, Nov. 30, 2020 (GLOBE NEWSWIRE) -- Albertsons Companies, Inc. (NYSE: ACI), announced on July 21, 2020 that it had entered into a tentative agreement with the trustees of the United Food and Commercial Workers International Union (“UFCW”) Union-Industry Pension (“National Fund”) to completely withdraw from the National Fund effective as of June 30, 2020 and entered into a Memorandum of Understanding (“MOU”) with nine UFCW local unions to establish a Variable Annuity Pension Plan (the “VAPP”), effective as of July 1, 2020, providing for future service and benefits for Albertsons Cos. associates. This agreement needed to be ratified by the nine local unions. Albertsons Cos. announced today that the Agreement and MOU have been ratified by all nine UFCW local unions.

“We are pleased with this agreement and value our partnership with UFCW to reach this positive outcome,” said Vivek Sankaran, President & CEO. “We believe this protects past benefits earned and will provide quality future benefits for our employees, while reducing financial risk going forward.

As announced on July 21, with the ratification of this agreement, Albertsons Cos. will pay an aggregate of approximately $286 million to the National Fund, which will be in full satisfaction of Albertsons Cos. withdrawal liability amount or mass withdrawal liability amount, by June 30, 2023. This amount will be paid in three installments over the next three years, any portion of which may be prepaid, in whole or in part. Within thirty (30) days of the establishment of the VAPP, Albertsons Cos. will pre-fund a transition reserve to support certain grandfathered participants by making a payment of approximately $8 million.

The established VAPP will receive monthly employer contributions from Albertsons Cos. at the same monthly rate (or hourly equivalent rate) it had contributed to the National Fund. Accrued benefits will be subject to a variable annuity calculation and be adjusted to reflect net investment returns above or below a hurdle rate of return of 5.5%. This pension benefit formula fixes the terms of ACI’s projected future pension costs through June 30, 2028 for these nine local UFCW unions, lowers ACI’s future financial risk, and helps to protect benefits for our valuable employees.