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Member, Beacon International Group, Ltd.
Scholastic Corp., New York, terminated its U.S. cash balance plan, its recent 10-K filing with the Securities and Exchange Commission shows.
The company's board voted on July 20 to terminate the plan because “the ongoing costs of maintaining the plan were growing at a greater rate than the benefit delivered to the company's employees and former employees,” the filing said. The termination is pending Internal Revenue Service and Pension Benefit Guaranty Corp. approval.
Plan assets will be distributed through either a future group annuity contract with an insurance company, a lump-sum payment or “to another qualified retirement plan,” the filing said. The plan has been frozen since July 1, 2009.
As of Dec. 31, 2014, the U.S. cash balance plan had $145.2 million in assets, according to the company's most recent Form 5500 filing. The company's indirect U.K. subsidiary, Scholastic Ltd., has an open defined benefit plan. Worldwide assets of both the U.S. cash balance plan and the U.K. pension plan totaled $164.2 million as of May 31, according to the 10-K filing, with projected benefit obligations totaling $164.8 million.
Gil A. Dickoff, senior vice president and treasurer, did not return a phone call seeking further information by press time.
Rob Kozlowski writes for Pensions & Investments, a sister publication of Business Insurance.