BOISE, Idaho, July 21, 2020 (GLOBE NEWSWIRE) — Albertsons Companies, Inc. (NYSE: ACI) announced today that it has entered into a tentative agreement with the trustees of the United Food and Commercial Workers International Union (“UFCW”) Union-Industry Pension Fund (“National Fund”), providing that ACI will permanently cease to have any obligation to contribute to the National Fund, a multiemployer pension plan, and will completely withdraw from the National Fund, effective as of June 30, 2020. ACI and the UFCW local unions have entered into a Memorandum of Understanding (MOU) that will instead establish a Variable Annuity Pension Plan (the “VAPP”), effective as of July 1, 2020, providing for future security and service benefits for ACI associates. This agreement will need to be ratified by the membership of each of these unions before it can take effect.“We are pleased with this agreement,” said Vivek Sankaran, President & CEO. “We believe this protects and provides the right benefits for our employees, while reducing financial risk going forward.”Upon ratification of the agreement by nine local UFCW unions, ACI will pay an aggregate of approximately $286 million to the National Fund, which will be in full satisfaction of ACI’s withdrawal liability amount or mass withdrawal liability amount, by June 30, 2023. ACI will pay this amount in three or four 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, ACI will pre-fund a transition reserve to support certain grandfathered participants by making a payment of approximately $8 to $9 million.ACI and the local unions will establish the VAPP by October 31, 2020. ACI will make monthly employer contributions to the VAPP 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.ACI expects to incur a pre-tax charge of approximately $286 million (or $213 million on an after-tax basis) to record the withdrawal liability for these benefits earned for prior service. This charge is expected to be recorded upon ratification of the agreement, which ACI expects to be in the third quarter of fiscal 2020.  This charge will not affect Adjusted EBITDA and Adjusted net income for fiscal 2020 as those measures exclude adjustment items such as this contribution.The Kroger Co. and The Stop and Shop Supermarket Company LLC have each entered into separate tentative agreements with the trustees of the National Fund to withdraw from the National Fund and a separate MOU with UFCW local unions to transition to their own new variable benefit plan. In addition to the MOU being subject to (and conditioned on) ratification by ACI associates from nine local UFCW unions, it is also subject to Kroger and Stop and Shop obtaining ratification of their respective MOUs providing for their withdrawals from the National Fund and satisfying all conditions necessary to permit either of them to participate in their applicable new variable benefit plan. ACI will only move forward with this transaction, withdrawing from the National Fund and transitioning its affected associates to the VAPP, if all of the above conditions are met.About Albertsons CompaniesAlbertsons Companies is one of the largest food and drug retailers in the United States, with both a strong local presence and national scale. Albertsons Companies operates stores across 34 states and the District of Columbia under 20 well-known banners including Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, Acme, Shaw’s, Star Market, United Supermarkets, Market Street and Haggen. Important Notice Regarding Forward-Looking StatementsThis press release contains certain forward-looking statements. Statements that are not historical facts, including statements regarding Albertsons Companies’ expectations, perspectives and projected financial performance, are forward-looking statements. The words “expect,” “believe,” “estimate,” “intend,” “plan” and similar expressions, when related to Albertsons Companies and its subsidiaries, indicate forward-looking statements. The forward-looking statements are based on Albertsons Companies’ current expectations and involve risks and uncertainties, including, but not limited to, risks and uncertainties regarding our current expectations and beliefs, other pending transactions and other future events. Albertsons Companies cautions that actual results could differ materially from the expectations described in the forward-looking statements. Albertsons Companies also cautions that undue reliance should not be placed on any of the forward-looking statements, which speak only as of the date of this release. Albertsons Companies undertakes no responsibility to update any of these forward-looking statements to reflect events or circumstances after the date of this report or to reflect actual outcomes. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in Albertsons Companies’ filings with the SEC, including its most recently filed Forms 10-Q and 10-K.Melissa Plaisance
Albertsons Companies
925-226-5115
[email protected]


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