Vought Aircraft Industries Inc., Dallas, will freeze its $1.35 billion pension plan effective Jan. 1, 2008, according to an 8-K filing. Vought also changed the contribution formula of its defined contribution plan, which had $292 million as of June 30, 2005. Vought will contribute a maximum of 4% of salary based on a 6% employee contribution; currently, the company match is contingent on an 8% employee contribution. In addition to the salary match, the company will contribute 3% of weekly earnings up to $45. The change will only affect workers currently enrolled in the plan; it was closed to new employees in October 2005.
Vought expects to save roughly $12.7 million in pension costs in 2007 and more than $20 million in 2008 and beyond. It plans to contribute $47.1 million to its pension plans in 2006 and has contributed $43.5 million to date. The plan had $1.9 billion in liabilities, according to the filing.
Spokeswoman Lynne Warne was not able to provide further details by press time.