NCR Corp. will give about 20,000 pension plan participants now receiving benefits the opportunity to convert their monthly annuity to a lump-sum benefit.
The offer is being made to former employees or beneficiaries who began receiving pension benefits between Jan. 1, 1994, and April 1, 2014.
The latest lump-sum offer is the second the Duluth, Georgia-based technology company has made in recent years. In 2012, the company gave 23,000 former employees who were eligible for but not yet receiving monthly pension payments the opportunity to convert their future annuity to a lump-sum benefit.
The offers are “part of our pension transformation and” are “consistent with our overall de-risking strategy,” NCR Treasurer John Boudreau said in a statement Tuesday.
By reducing the size of its pension plan through conversions from annuities to lump sums, employers are less exposed to factors such as interest-rate fluctuations and investment results that can cause big changes in their pension plan costs and contributions.
In addition, employers can reduce certain costs, such as payment of premiums to the Pension Benefit Guaranty Corp., associated with offering a defined benefit plan.
The lump-sum offers follow earlier NCR moves to reduce the size of its pension plan. The company closed off its plan to new employees in 2004 and completely froze the plan in 2007 while beefing up its 401(k) plan match.