About 70% take Magnetek pension annuity conversion offer
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Magnetek Inc. disclosed Wednesday that about 70% of its former employees who were vested but not receiving pension benefits accepted the company's offer to convert their future monthly annuities to cash lump-sum benefits.
In a 10-Q filing with the U.S. Securities and Exchange Commission, Magnetek said about 2,100 of the 3,000 participants who received the conversion offer accepted it.
“The benefits of the program for the company are a smaller pension plan, reduced volatility and administrative costs, lower mortality risk and, ultimately, a lower cost of potential annuitization of the plan at some future point in time,” the Menomonee Falls, Wisconsin-based provider of digital power control systems said in the filing.
In an earlier SEC filing, the company said it intends to terminate the plan, which it froze in 2003, “when economically feasible.”
As of Dec. 29, 2013, the plan was underfunded by about $48.5 million, with $160.6 million in assets and $209.1 million in liabilities, according to the company's 2013 10-K report.
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