US - Performance materials company Ferro Corporation is to freeze its DB pension scheme to current participants from April this year in a bid to save up to US$40m over the next five years.
The company, which achieved sales of around $1.8bn in 2004, has also introduced a host of other reforms, including additional contributions to the company's DC benefit plan.
Ferro said it would begin making an annual contribution, ranging from 2% to 8% based on each employee's pay and years of service, to the employee's company-sponsored 401(k) plan from April.
Company contributions will be made whether or not the employee contributes to the plan. Ferro said it would continue to match employee contributions to 401(k) accounts with company contributions up to 5% of pay in a bid to encourage employees to save their own money.
Ferro CEO James Kirsch said analysis of other companies' retirement programmes showed its DC plan would be offering competitive retirement benefits to its employees.
In a changing world, it is imperative that we continue to examine our benefit programs and make appropriate changes that are in the best interests of our Company, while allowing us to attract and retain the best talent, said Kirsch.
We are committed to offering employees a competitive retirement benefit, but we also need to effectively manage future retirement expenses. Achieving the right balance between competitive benefits and related costs is critical to securing the long-term future of Ferro.
By Damian Clarkson
This week's edition of Professional Pensions is out now.
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