SureWest Communications, Roseville, Calif., will freeze its pension plan on April 1, confirmed Karlyn Oberg, director of investor relations.
The telecommunications holding company offers a combined ESOP/401(k) plan that matches 100% of employee contributions up to 6% of pay. Company officials are considering enhancing the plan by adding features such as loan provisions, automatic enrollment and additional investment choices.
Cash contributions to the defined benefit plan have ranged from $3 million to $9 million over the past five years, and the annual service cost has averaged about $5 million over the same period.
"We have worked very hard to develop a total compensation and benefit package that rewards outstanding performance and meets the needs of our employees," Steve Oldham, SureWest's president and CEO, said in a news release. "The changes we have made to the pension plan are consistent with what is occurring throughout the country. What we have found is that only a very small percentage of our current employees will ultimately get full benefit from the current pension plan, so it makes absolute sense to freeze that benefit and reward employees in other ways."
As of Dec. 31, 2005 - the most recent figures available - SureWest had $113 million in DB assets and $65 million in defined contribution assets, Ms Oberg said.