Coca-Cola Co., Atlanta, is adopting a cash balance plan for all employees.
Under the cash balance plan design, employees will receive annual age-weighted credits equal to a percentage of pay. Those credits will start at 3% of pay and increase with age. Employees’ cash balance plan accounts also will be credited with interest, though Coca-Cola hasn’t yet decided on the interest-rate formula it will use.
The plan will be offered to most U.S. salaried and hourly employees hired as of Jan. 1, 2010. Current employees now in Coca-Cola’s traditional $1.5 billion final average pay plan will earn future benefits in the new plan on the same date.
Consultant Watson Wyatt Worldwide assisted in the cash balance plan design.
Jerry Geisel is editor-at-large with Business Insurance, a sister publication of Pensions & Investments.
