International Paper Co., Memphis, Tenn., will freeze the accrued benefits of salaried employees in its U.S. defined benefit pension fund effective Jan. 1, 2019, according to a 10-K filing with the U.S. Securities and Exchange Commission on Thursday.
The pension fund was closed to new salaried hires, as well as new hourly hires receiving salaried benefits, on July 1, 2004. Hourly and union employees still participate in the DB plan regardless of hire date.
The company will also freeze its nonqualified pension funds, which provide benefits based on eligible compensation in excess of IRS limits. They are the Pension Restoration Plan and Supplemental Retirement Plans for Senior Managers. The assets sizes of the two plans were not available by press time.
For service on or after Jan. 1, 2019, employees affected by the frozen DB plans will receive Retirement Savings Account contributions. Further information on the contributions was not available by press time.
As of Dec. 31, the U.S. DB plan had $10.7 billion in assets, and $12.9 billion in projected benefit obligations for a funding ratio of 83%, according to the 10-K filing.
Robert Hunkeler, vice president-investments, was not available by press time; Macpherson Carroll, analyst-trust investments, and Thomas J. Ryan, spokesman, did not return phone calls by press time.
Rob Kozlowski writes for Pensions & Investments, a sister publication of Business Insurance.