FedEx plans to make changes to its retirement plans due to recently adopted and proposed changes in accounting rules, the Pension Protection Act, and shifting demographic trends.
Under the new program, most eligible employees who participate in a pension plan will begin accruing benefits under a cash balance formula effective June 1, 2008.
Any benefits accrued under a traditional pension benefit formula will be capped as of May 31, 2008 and payable at retirement. The changes won’t affect the benefits of current retirees.
The company will also increase its matching contributions and provide additional investment options for its 401(k)plans.
FedEx expects to spend about the same amount on its employees’ retirement plans over the long run as it would have spent under the current design and rules.
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