Starting next year, new employees at 3M will get a 401(k) savings plan instead of the traditional defined benefit plan.
The St. Paul, Minn.-based company will contribute 3% of pay to a retirement account and provide a dollar-for-dollar match on employee contributions of up to 6% of pay.
The new plan will be portable, which means employees can take the full vested value of their accounts with them if they leave the firm for any reason or they may keep their accounts at 3M.
The company is also making changes to its retiree-health benefits program. For pre-Medicare-eligible retirees, the plan offers a new cost-sharing approach to help pay medical premiums as well as the choice to participate in a consumer-directed plan with a tax-effective savings account.
“Our new retirement benefits program also will help us attract and retain talent and address the needs of today’s changing workforce, which desires more portability and greater involvement in decisions affecting their financial futures,” says Jan Angell, vice-president, 3M compensation and benefits.
The firm is making the changes because of an aging workforce and “the increasing ratio of retirees as a percent of active employees.” A 3M spokesperson tells Benefits Canada that the changes only affect the company’s U.S. employees.
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