J.C. Penney Co Inc announced Friday its plan to cut off at least a third of its $5 billion U.S. pension obligation by allowing Prudential Insurance Co of America to take over its administration and benefits payments to thousands of retirees.

According to Yahoo Finance, the struggling retailer aims to reduce its pension obligation by up to 35 percent through lump sum payments and early retirement offers. 

Prudential is assuming responsibility over 43,000 retirees and beneficiaries as part of JC Penny's plan.

The realization of the transaction between the two companies is expected not later this year, and J.C. Penney is expecting that it will not be required, in the near future, to make cash contributions to its pension plan called "the Plan."

"We are grateful for all the contributions our retirees have made to JC Penney. We are confident that Prudential, an expert in this field, will provide great service to our retirees receiving monthly payments," Chief Financial Officer Ed Record was quoted as saying by MarketWatch. 

Record went on to say, "These actions not only continue to provide excellent benefit security for our retirees, but also further the Company's objective of de-risking the Plan while improving the Company's long-term risk profile."

In the company's announcement, it was also noted that 12,000 retirees and surviving beneficiaries had elected to obtain lump-sum payments. Also, approximately 1,900 former employees of the company have also opted to receive lump sums after deferring vested benefits.

"Although the plan has been fully funded since 2009, owing to successful execution of the company's asset de-risking strategy, market conditions were favorable to reduce the obligation now," the company said, as per Reuters. 

At the closing of the transaction, a non-cash pension settlement charge is expected, but this will not be included in the JC Penney's 2015 adjuster results.