The cut that is slated to take effect in January 2008 will mean that the company’s savings and investment plan will include a 100% employee participation through a company contribution of 3% each employee’s pay, and for employees who contribute to the plan, the company will match on the first 6% of their savings – which means doubling the current match.
According to Reuters, the change in contributions will not affect the DuPont’s current retirees, former employees with vested benefits or current employees who retire before January 1, 2008.
The chemical giant also said employees hired in 2007 will no longer be eligible to participate in the defined benefits plan, nor will they receive company subsidy for retiree health care or retiree life insurance.
DuPont is among some of the first big US companies to make changes to its DB plan following President George Bush’s signing of the Pension Protection Act, which stepped up plan funding rules (See What’s Inside the Pension Protection Act? ). DuPont said its decision to freeze was in line with “market trends in employee benefits.” But some experts contend that freezing DB plans will not be a short-term fix (See DB Freeze No Short-Term Solution, Claim Panelsts ).