US - Tecumseh Products has closed its pension plan to its 3,600 current and former salaried employees - despite the fact it is over-funded.
Tecumseh Products is a global manufacturer of hermetic compressors for air conditioning and refrigeration products, gasoline engines and power train components for lawn and garden applications, industrial pumps, and small electric motors.
Reports in 2005 showed the fund had assets of around US$594m, exceeding total future obligations by US$183m.
If the Department of Labor approves the proposal, Tecumseh will close the plan on April, 30 and policies with private insurance will provide payments to current and future retirees.
Pension payments will be frozen at the amount accrued as of May 1, 2007.
Hourly workers at the US plant and 70% of the company’s workforce overseas will not be affected by the proposed changes.
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