Motorola Solutions Inc., Schaumburg, Ill., entered into a pension buyout agreement with Prudential Insurance Co. of America and will offer lump-sum payouts to terminated vested employees to reduce $4.2 billion in pension obligations, said a SEC filing.

The buyout will total approximately $3 billion and cover approximately 30,000 Motorola Solutions retirees.

According to Prudential, this is the third-largest U.S. pension buyout to date, after General Motors Co. and Verizon Communications Inc.

Motorola also said it intends to contribute $1.1 billion to improve the funded status of its pension plans.

Separately, the firm said it is offering lump-sum distributions to 32,000 former employees that left the company before June 30 and have vested in the plan but haven’t yet received benefits. The lump-sum program will be capped at $1 billion.

Source: Pensions & Investments