NCR to freeze pension plans, increase 401(k) contribution
Dayton Business Journal
NCR Corp. is freezing its U.S. pension plans and enhancing certain retirement savings plans in a move to lower the company's net retirement expense by about $40 million next year.
NCR (NYSE: NCR) is ending its defined benefits plan and increasing its contributions on behalf of employees to the company's 401(k) savings plan, according to a Wednesday filing with the U.S. Securities and Exchange Commission.
Beginning Jan. 1, the company will match 100 percent of the first 4 percent contributed by employees to their 401(k) plan. NCR will match 50 percent of the next 2 percent those employees contribute. That equates to about a 5 percent match, which is an increase from 3.75 percent match that is currently in place, said a company spokesman.
By freezing the pension plan, no further contributions will be made to it after Dec. 31. However, NCR employees will not lose what they have already saved.
In 2004, NCR closed its U.S. pension plans to new participants and froze the pension benefits of plan participants under the age of 40 while "grandfathering" participants over the age of 40, which allowed them to continue earning benefits. The net retirement expense related to the grandfathered employees was expected to decline gradually over the next 25 years as the employee reach retirement.
The change, which the board of directors approved Sept. 26, will speed up the savings that were expected from the 2004 change. The savings will be realized immediately beginning in 2007 rather than trickling in over the 25 year period.
Dayton-based NCR is a maker of automated teller machines and other financial equipment. It is Dayton's largest company with nearly $6 billion in revenue last year. It employs 2,000 people locally and approximately 29,300 worldwide.
E-mail dayton@bizjournals.com. Call 222-6900.
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