Sonesta International Hotels Corp., Boston, will freeze its defined benefit plan to all of its U.S. employees effective Dec. 31, and begin matching contributions up to 4% of employees' earnings to its 401(k) plan, according to an SEC filing today. The company currently doesn't make any 401(k) contributions. Defined benefit participants will continue to be eligible to receive a benefit provided they meet the five-year vesting requirement, but the amount of all benefits will be frozen at the Dec. 31, 2006, level.
Sonesta officials expect the decision will cap the retirement plan cost at the level of its outlays for the current year.
Sonesta's defined benefit plan had $19.7 million in assets and its 401(k) plan, $7.7 million, both as of Dec. 31, 2005, according to the Money Market Directory.