J.C. Penney Co. reached a deal with about 12,000 retirees and beneficiaries to accept a lump-sum payment and settle pension obligations, helping reduce the amount that the department-store chain will have to pay by as much as 35 percent.

The company won't need to make any cash contribution, and Prudential Financial Inc. will settle a "substantial" amount of pension benefit obligations, J.C. Penney said in a statement Friday. It has $5 billion in U.S. pension obligations.

The 113-year-old retailer is part of a growing list of companies rethinking their pension plans. Kraft Heinz Co., the food giant created out of a merger this year, said last month that it was trying to shift some retirees away from pension plans under a voluntary program. Former Kraft employees who have a future estimated benefit value of under $2,500 a month at age 65, and have not started receiving the money, can receive an immediate lump-sum payment, the company said.

Prudential, the second-largest U.S. life insurer, also has struck multibillion-dollar deals with companies such as General Motors to assume the risk in case market returns are inadequate or beneficiaries live longer than expected. The agreements add to assets under management for insurers, which already oversee billions of dollars in bonds and handle risks tied to life expectancies.

At J.C. Penney, Chief Executive Officer Marvin Ellison is working to cut costs and win back shoppers after years of red ink. In August, the company posted a narrower quarterly loss and said the back-to-school season was off to a good start. J.C. Penney shares have climbed 43 percent this year.