Blogging Employee Benefits

January 15, 2006

Another Pension Freeze

Filed under: Pensions — Fuguerre @ 1:48 am

“The modernization of our retirement benefit plans will allow the employees more control over their financial futures….Many companies are transitioning their benefit plans to provide greater flexibility as well as portability for employees. We, as a company, want the stability and predictability of a savings plan, rather than a traditional pension plan, to help our employees save for retirement and balance the needs of the business.”

Winter deepens another degree in the defined benefit pension system, as Alabama-based Wolverine Tube announces that it is freezing its pension plan, effective February 28, 2006. Beginning March 1, the company will add a 3% contribution to each affected employee’s 401(k) account. A “success sharing component” is also being added to the 401(k) plan, and additional transition contributions will be made for certain employees. The company projects cost savings of $24 million over the next five years from its retirement plan changes. Concurrently, Wolverine Tube is eliminating subsidies for retiree medical insurance for employees younger than age 55 (age 57 for Pennsylvania employees). [Press Release (1/13/06)]

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