Anixter International freezes pension plan, beefs up 401(k)
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Communications and security products supplier Anixter International Inc. is freezing one of its defined benefit pension plans and beefing up its 401(k) plan.
Effective Dec. 31, the Glenview, Ill.-based company will freeze its final average pay plan for employees hired prior to June 1, 2004.
Those employees will earn future benefits in a defined benefit plan now covering employees hired since June 1, 2004. Under that plan, employees receive credits, equal to a percentage of compensation, with the credits based on service.
In addition, the company is sweetening its 401(k) plan match. The company will match 50% of employee' salary deferrals up to 5% of pay. Currently, it matches 25% of employees' salary deferrals up to 6% of compensation.
In another pension issue, more than 50% of former vested Anixter employees who have terminated employment, but are not yet eligible to receive benefits, accepted a company offer last year to convert their future annuity to a cash lump-sum payment.
That acceptance rate exceeded company estimates, Chief Financial Officer Ted Dosch said Thursday. He attributed the high acceptance rate to a strong communications effort in which the company detailed to each eligible participant the amount of the lump sum compared with the future annuity.
“They knew exactly what they would get,” Mr. Dosch said.
More than a dozen major employers in the past year have made such offers. General Motors Co., the largest company to have made such an offer, earlier disclosed that more than 30% of eligible participants accepted its conversion offer.
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