Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
July 25 — Verizon Communications Inc. will add more than $1 billion in assets to the 401(k) plans it operates in connection with its announced purchase of Yahoo! Inc. for $4.8 billion.
According to the parties’ stock purchase agreement, Verizon will take ownership of Yahoo’s 401(k) plan, which had nearly 11,000 participants and more than $1 billion in assets as of 2014. Yahoo's contributions to the 401(k) plan totaled $21 million in 2015, according to the company's most recent annual report.
Verizon also will take over Yahoo's non-U.S. benefit plans. In 2015, Yahoo contributed about $15 million to its defined contribution plans for non-U.S. employees, according to the company's 2015 annual report.
The purchase agreement obligates Verizon to continue providing 401(k), medical and welfare benefits to Yahoo employees for the next 12 months. Those benefits must be “no less favorable, in the aggregate” than the benefits provided to similarly situated employees of AOL Inc., which Verizon acquired in 2015.
Yahoo doesn't sponsor a defined benefit pension plan. According to its most recent annual report, the company terminated its employee stock purchase plan in 2015.
The deal is subject to approval by Yahoo shareholders and government regulators, and is expected to close in the first quarter of next year, the companies said.
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