Walmart Offloading British Subsidiary’s Retirement Plan For $2.2B Pretax Charge

By John Heerdink LinkedIn

Walmart Stores, Inc. (WMT) is a worldwide retailer that operates in various formats. The three segments of the company include Walmart U.S., Walmart International, and Sam’s Club. The company is comprised of discount stores, supermarkets, supercenters, hypermarkets, warehouse clubs, cash and carry stores, home improvement stores, specialty electronics stores, apparel stores, drug stores, convenience stores, and membership-only warehouse clubs; and retail Websites.

Walmart is reportedly offloading the cost of the retirement plan of employees for Asda, it’s British subsidiary to Rothesay Life Plc by incurring a pretax charge of about $2.2 billion. Rothesay Life Plc to handle pension liabilities for about 12,000 members going forward.

Discharge of pension costs at Asda could possibly be Walmart’s step for the sale or an IPO of Asda, since having a large employee retirement plan on its balance sheet could pose an issue if the retail giant is planning to divest the unit, informed James Biggs, a partner at Employee Benefits Collective LLP.

“Rothesay takes responsibility for paying benefits to employees. In essence, it shifts the liability,” ,  “Letting these liabilities rumble on into the future brings risk and potential cost creep, and can be a millstone around the neck of an employer.” stated Biggs.

Earlier this year in May, Walmart’s international CEO and a former Asda executive, Judith McKenna, informed that Walmart was considering an IPO for Asda which was blocked by U.K. antitrust regulators after J Sainsbury Plc’s placed bid to buy Asda, last month.

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(Read Original Story: Walmart Will Take $2.2 Billion Charge for Asda Pension Shift in Bloomberg)


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