Corteva Agriscience will handle pension plans for both DuPont and Corteva after the two companies are separated from DowDuPont next year.
The announcement was made by Edward Breen, CEO of DowDuPont.
The letter from Breen came as DowDuPont announced future members of the boards of directors of the three companies to be spun off in 2019. Dow will assume pension obligations of its employees, with DuPont having no Dow obligations.
Breen will serve as executive chairman of DuPont, which is slated to separate from DowDuPont in June 2019, with Dow spinning off in April of the same year. He will also serve on Corteva’s board.
Corteva is comprised of the Dow and DuPont agribusiness operation. The combination was widely believed to be the main reason for the merger of Dow and DuPont and the planned spinoff.
Breen cited what sees as a strong balance sheet for Corteva once it is spun off from DowDuPont. The ag business is subject to market swings but has been touted by management as a strong player in the world market.
At present, the agriscience business is seeing challenges from low crop prices and uncertainties from tariffs.
“Moreover, consolidating plan administration through one strong entity will allow for more efficient recordkeeping systems and supporting processes as well as more effective interaction with participants.”
Breen noted in the letter that DowDuPont made a contribution of $1.1 billion in September and nearly $4 billion during the last two years.
DuPont pensioners have been concerned about what they view as underfunding of the benefit plan and the possibility of other changes.
Breen said in the letter that DuPont will honor its obligations.
Both Corteva and DuPont will be based in northern Delaware, with Dow headquartered in its hometown of Midland, MI.
