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Benefits January 10, 2006
Textile Giant Announces Pension Plan Freeze
January 10, 2006 (PLANSPONSOR.com) - In a move that
reflects a continuing trend for defined benefit plans,
Milliken & Co. has announced its 9,300 employees will no
longer accrue pension benefits.
Reported by Rebecca Moore
The Associated Press reports that Company spokesman Richard Dillard said in a written statement that the changes, effective December 31, 2005, were caused by “the very competitive global cost competitiveness, and pension cost volatility, which all companies are facing.” The reasons are common to employers making their decisions to ax pension plans (See Expense and Funding Volatility Lead Co.’s to Ax Pension Plans).
Just as IBM did recently (See IBM Beefs Up 401(k), Backs Off DB – Come 2008), Dillard said Milliken has improved its 401(k) plan to make up for the pension freeze. Retiring workers will receive the pension benefits accrued up to the time of the freeze.
Communications company, Verizon also recently announced that it will freeze its pension plan for managers and increase matching contributions in its 401(k) plan instead (SeeVerizon Announces Pension Plan Freeze).