LEXINGTON, Mass. -- Raytheon Co. has merged its stock ownership plans and nine 401(k) plans into a single defined contribution plan with $6.8 billion in assets.
The company also expanded the investment options, increased the employer match and raised employee deferral rates, according to documents it filed in July with the Securities and Exchange Commission.
Fidelity Investments, Boston, continues as record keeper and administrator of the 401(k) plan -- the Raytheon Savings and Investment Plan, said David Polk, Raytheon's manager of media relations. Just last month, Raytheon announced it had added Fidelity's Portfolio Planner, a retirement planning tool for 401(k) plan participants.
Raytheon also has a $291 million defined contribution plan for subsidiaries. In addition, Raytheon has a $12.8 billion defined benefit plan that includes about 14 million shares of company stock worth about $736 million and $15 million in Raytheon fixed-income securities.
The company's defined benefit and defined contribution assets swelled last year following Raytheon's purchase of Hughes Electronics Corp., which had been owned by General Motors Corp. Defined benefit assets grew by $6.4 billion. On the defined contribution side, ex-Hughes employees rolled over about $1.7 billion to the Raytheon plans from plans sponsored by GM, SEC documents show.
The consolidated 401(k) plan has 14 investment options, up from seven in the major plan before the consolidation.
Among the options are several Fidelity funds, three from Vanguard, one from T. Rowe Price and one from Templeton, Mr. Polk said.
When it merged the various defined contribution plans into the large one, Raytheon changed the eligibility so that all plan participants could join the 401(k) plan immediately. Before Jan. 1, employees had to have three months of service and could enter the plan only on the first day of each month, SEC documents state.
Moreover, all employee and employer contributions to the 401(k) plan are now immediately 100% vested.
The employer match is dollar for dollar up to a maximum of 4% of compensation; it had been 50 cents for every $1 contributed by the employee, up to a maximum of 3% of salary.
The company match goes into the company stock fund and must be held there until the beginning of the fifth plan year following the plan year for which the contribution was made.
Raytheon also makes an ESOP contribution equal to 0.5% of compensation. The ESOP portion of the defined contribution plan is invested primarily in Raytheon Co. Class B common stock.
In addition, Raytheon has included Fidelity's Portfolio Planner. This online retirement education tool gives participants savings needs analysis and asset allocation model portfolios that are customized to the investment options in Raytheon's plan. Raytheon employees who have an Web browser can use the Portfolio Planner at work, Mr. Polk said.