US - Unisys is set to freeze its current defined benefit plan at year-end 2006 in a move that will save the company US$700m in the next decade and $45m in the first quarter of 2007 alone.
The shift will not affect retirement benefits already accrued before December 31 2006, with Unisys announcing plans to beef up the company’s 401(k) offering.
Unisys said it would redesign the company’s Savings Plan to increase the company-funded stock-based matching contribution to 100% of the first 6% of eligible pay contributed by participants, significantly higher than the current 50% of the first 4% of eligible pay.
Unisys CEO Joseph McGrath [pictured] said of the changes: “We think they have struck the appropriate balance between controlling our pension costs and continuing to help our employees prepare for retirement.”
Based on the changes to the US plans, Unisys’ 2006 pension expense worldwide are expected to be around $168m, down from $181 million in 2005. “Contributing to our employees’ retirements while keeping Unisys competitive in the marketplace is an issue we have been giving thoughtful consideration to for some time,” added McGrath.
By Damian Clarkson
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