E.I. du Pont de Nemours & Co., Wilmington, Del., will freeze its $15.9 billion pension plan to new employees, effective Jan. 1, 2007, and reduce the accrual rate for its current employees to one-third its current level, effective at the start of 2008, confirmed spokeswoman Lori Captain.
New employees hired after Jan. 1, 2007, will be put into DuPont's $9.5 billion 401(k) plan. The company will increase its employee match dollar for dollar up to 6% of compensation, up from 50 cents on the dollar, Ms. Captain said. The increase will apply to current employees as of Jan. 1, 2008. The definition of compensation will also be expanded to include variable compensation and overtime; compensation is currently defined as base pay. DuPont will also contribute 3% of each employee's pay into the defined contribution plan beginning Jan. 1, 2008.
The pension change is expected to improve earnings by about 3 cents per share and, beginning in 2008, by about 5 cents per share, according to a news release.