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Member, Beacon International Group, Ltd.
HERSHEY, Pa.--Hershey Co., the venerable candy manufacturer, will close off its defined benefit pension plan to new employees, beef up its 401(k) plan for current and future employees and reduce future benefit accruals to current pension plan participants.
A sweetened 401(k) plan will be the sole retirement savings plan offered to employees hired as of Jan. 1, 2007. Hershey will match 75% of employees' salary deferrals, up to 6% of pay. Additionally, Hershey will make an automatic 401(k) plan contribution on the first 3% of salary.
Hershey will reduce future benefit accruals for employees in the defined benefit plan, which is a cash balance plan. However, Hershey will improve its 401(k) match.
Currently, Hershey matches 75% of employees' deferrals on the first 2% of pay and 50% of deferrals on the next 3% of pay. Instead, Hershey will match 75% of current employees' 401(k) plan deferrals on the first 6% of pay, the same match it will provide new employees. However, current employees will not receive the automatic 3% contribution that Hershey will provide to new employees.
Hershey executives said the changes will help the company to better manage retirement plan costs while still providing an attractive retirement benefits plan program.
The changes affect about 6,400 U.S. employees not covered by a collective bargaining agreement.