CBS Corp. said in a filing with the Securities and Exchange Commission that it plans to purchase a group annuity contract, which will require an insurance company to pay out pension payments. The contract will reduce CBS’s outstanding pension benefit obligations by about $800 million, or 20% of the company’s total obligations, according to the filing. As part of the agreement, CBS will record a one-time settlement charge of roughly $365 million in the fourth quarter. The charge reflects the accelerated recognition of a portion of the unamortized losses in the pension plan. CBS also said it plans to make a discretionary $500 million contribution to prefund its qualified plans, expected to be partially funded by long-term debt. Shares of CBS have dropped nearly 13% in the year to date, while the S&P 500 index is up close to 16% and the Dow Jones Industrial Average is up more than 19% during the same time frame.
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