Archive
By Staff Report
Apr. 11, 2006
| Time period | Participation | Plan benefit formula | Retirement benefits |
| Until April 1993 | All employees | One-third of benefits accrue using a traditional defined-benefit plan formula, and two-thirds of benefits accrue using a variable-benefit formula in which retirement benefits can vary and participants bear investment risk. | Full retirement benefits at age 62. |
| April 1993-January 2005 | Employees hired before April 1993 remain in the original plan. New hires are enrolled in a defined-contribution plan. | Original plan is unchanged. Eight percent of pay is contributed to a defined-contribution plan on employees’ behalf. | Full retirement benefits at age 62 for employees in the original plan. Retirement benefits available as governed by federal regulations and tax law. |
| Current plan | Employees hired after April 1993 have a choice between participating solely in the defined-contribution plan or participating in a new plan that provides a mix of defined-contribution and defined-benefit plan participation. | Original plan remains unchanged for employees hired before April 1993. New plan allows employees a choice between: –Continuing to receive a company contribution to the defined-contribution plan equal to 8 percent of salary or –Receiving a company contribution to the defined-contribution plan equal to 4 percent of salary and a benefit accrual in the defined-benefit pension plan designed to equal 4 percent of employees’ pay*. The same ratio of fixed and variable benefits used in the original pension plan applies to the defined-benefit pension plan. | Full retirement benefits at age 62 for employees in the original plan. Employees participating solely in the defined-contribution plan can take retirement benefits at any time subject to federal regulations and tax law. Employees hired after April 1993 and participating in the defined-benefit pension plan can get full retirement benefits from that plan at age 65. |
*Because a portion of the defined-benefit pension plan is accrued using a variable-benefit formula in which benefits vary based on investment performance and participants bear investment risk, the 4 percent figure is calculated using an assumption of “acceptable investment performance,” according to company representatives.
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