In an effort to control administrative costs and make retirement planning easier for its employees, Dresser Industries Inc., Dallas, has frozen its $150 million defined benefit plan and has taken steps to enhance its 401(k) plan.
Paul M. Bryant, vice president-human resources, said the defined benefit plan at Dresser had become administratively burdensome following several recent acquisitions, and was more costly to administer than a defined contribution plan.
The Dresser action affects directly only its 7,000 domestic employees out of 33,000 worldwide, he said.
The pension plan was frozen with no further age and service accruals as of June 9. At that time, a company match was instituted for the 401(k) plan, which had been established in 1986 without company matching.
The plan has assets of about $400 million.
Dresser will make an initial contribution of 3% of pay to all domestic employees in the 401(k) plan, and will offer a 100% match on employee deferrals up to 2% of pay and a 50% match on the next 4% of employees' deferrals.
The defined benefit plan carried too many associated costs such as actuarial fees, PBGC premiums and administrative costs.
Plus, Mr. Bryant said, matters were complicated with the acquisitions made by Dresser in recent years.
