Illinois Chemical Company Freezes Its DB Plan

February 21, 2005 (PLANSPONSOR.com) - Illinois-based chemical producer, Stepan Company, has joined the swelling list of companies swapping their defined benefits plans for 401(k) options, after Stepan's Board of Directors approved a plan that would freeze its non-union defined benefit pension plan and replace it with a fixed 4% 401(k) contribution.
By PS

The decision will affect the company’s more than 1,500-US salaried workforce and certain participants in the US hourly workforce, and is set to happen June 30, 2006.

A statement released by the company assured the switch to 401(k) contributions “would balance the needs of providing retirement security for our employees, while providing a more predictable cost structure for the company.”

With this decision, Stepan joins the onslaught of US and UK companies making similar moves.  Recent companies that have followed the same path include Nissan (See  Nissan Follows Trend of DB to DC Switch ) and Northwest (See  Northwest Airlines Freezes Pension Plans  ).

-Adrien Martin

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