According to a news release from the company, its plan is to focus its retirement program on market-competitive offerings. The company also states the move will result in more predictable retirement plan costs, cap future financial liabilities and better position for the company to grow and compete.
In addition to the pension freeze, McGraw-Hill also announced a reduction in executive staff of its Education unit by 20% and its workforce by 10%, or about 550 positions.
The company said the workforce reductions are being done to create a flatter and more agile organization. The company expects to have the majority of staff reductions completed by the end of the fourth quarter, and some to take place in the first half of 2012.
By freezing the pension fund and making the workforce reductions, McGraw-Hill expects to have $50 million in annual cost savings.