Alliant Techsystems (ATK) announced in a news release that newly hired non-union workers will only be offered the beefed up DC plan as of January 1, 2007. The company did not provide details about its planned DC changes.
For most employees with at least 15 years of service as of January 1, 2004, Alliant matches 50% of employees’ salary deferrals, up to 6% of pay. For employees with less than 15 years of service, Alliant matches 100% of deferrals on the first 3% of pay and 50% of deferrals on the next 5% of pay.
“The new design will reduce the financial risks associated with future retirement benefit costs, while still allowing ATK to offer an attractive benefit plan to new employees,” Alliant said in its statement.
Asserted ATK Chairman and CEO Dan Murphy, in the statement: “This plan significantly increases EPS, strengthens our cash flow profile, reduces exposure to the volatility of today’s pension plan environment, and affords us the strategic flexibility to aggressively pursue new opportunities to continue growing our business.”
Separately, the company announced that it will also contribute approximately $300 million to its DB plan, bringing total contributions by the end of the calendar year to $385 million. Officials said in the statement that the goal is to fully fund the plan, reduce future pension expenses, and eliminate volatility of future retirement benefit costs.
ATK is a $3.4 billion advanced weapon and space systems company employing approximately 15,000 people in 22 states. More information is at http://www.atk.com/ .
Numerous companies have followed a similar path in recent months with their pension programs (See Tenneco Estimates $11M Annual Savings from DB Freeze , Oregon-based Blount International to Freeze its DB Plan ).