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MIAMI--Ryder System Inc. is phasing out its defined benefit pension plan and beefing up its 401(k) plan.
Effective Jan. 1, 2008, new employees and employees whose combined age and service are less than 65 will receive retirement savings benefits exclusively through a 401(k) plan. Regardless of whether an employee contributes, the Miami-based truck leasing company will make an automatic contribution equal to 3% of employee pay.
Additionally, Ryder will match 50% of employees' salary deferrals up to 5% of pay, and will make an additional contribution up to 3% of employee pay based on the company's performance.
Employees whose combined years and service are at least 65 and those with at least 20 years of service will be given a choice of remaining in the current pension plan or moving to the enhanced 401(k) plan.
About 9,400 of Ryder's 27,000 employees will be affected by the change.
Ryder, which in 2005 reported $5.7 billion in revenues and $226 million in net income, said the defined benefit plan phaseout reflects "established marketplace trends."