This agreement is the second pension risk transfer between the two companies in just over a year. Last October, International Paper agreed to transfer approximately $1.3 billion of its pension liabilities to Prudential, an agreement covering 45,000 of International Paper's retirees.

Such agreements reflect a growing desire among companies to take active steps to reduce the risks, costs and liabilities associated with running a defined benefit pension plan. In the last two years, pensions have generally become better funded because of rising asset prices and interest rates. Stronger funding levels put companies in a better position to consider pension risk transfer as a solution for addressing their pension obligations. When choosing to transfer pension risks, companies are seeking shelter from the increasing costs and substantial risks of market volatility and longevity increases.

Glenn O'Brien, managing director and head of new business for Prudential Retirement, said, "We are proud that Prudential has again been chosen to help secure and maintain the retirement benefits of International Paper's retirees. International Paper is entrusting its pension promises to a company with deep experience in managing retirement benefits, and we are committed to providing these retirees with a seamless transition."