Visteon Corporation has agreed to transfer US pension assets to Prudential Insurance Company of America, a subsidiary of Prudential Financial, to settle approximately US$350m of Visteon's $1.1bn in outstanding US pension obligations.

Under the agreement, the Visteon pension plan will purchase a group annuity contract from Prudential which will then assume the obligation to make future annuity payments to Visteon hourly retirees.

"The transaction is designed to further Visteon's objective of reducing risk in the pension plan and better managing the ongoing cost volatility of such plans, while continuing to meet its obligation to all current participants. The annuity purchase requires no immediate cash contribution from the company and will be funded by existing plan assets," Visteon said in a statement.

The pension transfer will not change the amount of the monthly pension benefit received by affected retirees and surviving beneficiaries. The group annuity contract includes an irrevocable commitment by Prudential to make annuity payments to affected retirees covered under the contract.