Effective January 2008, DuPont announced Aug. 28 that it will change its U.S. defined benefit pension plan and its savings plan.
After 2007 defined benefit pension program will be reduced to one-third of its current levels.
A newer savings and investment plan will include 100% employee participation in the plan through a company contribution of 3% of each employee's pay into the account. Employees who contribute to the savings plan will also receive a 100% match on the first 6% of their savings which effectively doubles the current company match.
"The planned changes reinforce our commitment to help employees provide for a secure retirement. They also modernize the design of our savings and retirement plans for a new generation of employees, many of whom want more direct control and portability in their benefits," said James C. Borel, senior vice president, DuPont human resources in a statement.
Survivor benefits provided through the pension plans will not continue to grow after Dec. 31, 2007.
New hires after Jan. 1, 2007 will not be eligible to participate in the Pension and Retirement Plan and will not receive a company subsidy for retiree healthcare or retiree life insurance. They will however be able to participate in the new savings plan.
The plan amendments are expected to improve earnings by about $.03 per share in 2007 and $.05 per share beginning in 2008, according to a company statement.