J.C. Penney said on Thursday it has agreed to transfer $2.8 billion of its pension obligations to annuities provider and Apollo Global Management Inc.-backed, Athene, ensuring that the U.S. department store chain’s retired employees will continue to get their benefits.

J.C. Penney, which said in December that it would seek to exit bankruptcy protection sometime this year, will not receive any money as part of the deal, but will shed the liabilities that came with the pensions.

“We are thrilled that this one-of-a-kind transaction will enable the Pension Plan to pay the benefits that JCPenney intended the participants to receive,” J.C. Penny said in an emailed statement.

Apollo Global Management Inc, the private equity firm that controls Athene and earlier this month inked an $11 billion deal to take it private, is seeking to profit by earning a higher return on investing the pension assets than its payouts to the retirees will be. It is Athene’s biggest ever pension transfer deal.


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Source: Reuters

Reporting by Joshua Franklin in Boston; Editing by Bill Berkrot