Anixter International Inc., Glenview, Ill., will freeze its U.S. defined benefit pension plan at the end of 2013 in an effort to reduce pension costs and volatility, confirmed Ted Dosch, chief financial officer and executive vice president, finance.
The freeze affects employees hired before June 1, 2004. All new employees since that date have been placed in Anixter’s $207 million 401(k) Anixter Inc. Employee Savings Plan. Employer and employee contributions for those affected by the freeze will now go into the 401(k) plan.
Anixter also reported in its fourth-quarter earnings statement that it contributed an additional $34 million to its pension plan to fund lump-sum payouts that were offered to terminated vested employees in the fourth quarter. It originally contributed $16 million to the pension plan in 2012 and expects a similar contribution this year, Mr. Dosch said in a telephone interview.
Anixter also increased the company match for the 401(k) plan as part of the new restructuring. It will match up to 50% on the first 5% of employee contributions, up from a 25% match on the first 6% of employee contributions, Mr. Dosch said.
Anixter’s U.S. pension plan had about $158 million in assets and $287.7 million in liabilities for a funded status of 54.9%, as of Dec. 31, 2011, according to its most recent 10-K filing. Mr. Dosch said the pension plan assets are closer to $200 million now.