Struggling Refiner Reveals Pension, Retiree Health Cutbacks

November 13, 2009 (PLANSPONSOR.com) - Philadelphia refiner Sunoco announced it will freeze its defined benefit pension plans for most workers and phase out its medical benefits for most retirees after July 1, 2010, as part of a cost-cutting effort.

Sunoco spokesman Thomas P. Golembeski told the Philadelphia Inquirer the DB cutback would be accompanied by unspecified 401(k) enhancements.

The company made the announcement as it reported its third-quarter financial results showing a $312-million loss, according to a Sunoco news release. Golembeski said Sunoco deliberately delayed the benefit changes for eight months to allow employees  enough time for proper planning including "individual decisions regarding retirement."

“These moves will bring the Company more predictable retirement plan costs and cash flow,” Sunoco said in its news release. “By freezing the benefits, Sunoco’s future financial liabilities and requirements for cash contributions to the pension plans and funding of retiree health care will be substantially reduced.”

Fred Schneyer
editors@plansponsor.com