Arconic Inc., Pittsburgh, announced on Monday it will freeze its U.S. defined benefit plans for all 7,900 of its U.S.-based salaried and non-bargained hourly employees, effective April 1.
The pension benefits already earned by these employees through March 31 will be available when they reach retirement age. Retirees already collecting benefits and former employees with vested benefits under the pension plans will not be impacted by the change.
Arconic will automatically contribute 3% of affected employees' eligible compensation to the company's applicable 401(k) plan and match their contributions up to 6% of eligible compensation, the same arrangement for new employees, according to a news release.
Arconic is also providing an automatic transition contribution of 3% of eligible compensation for the remaining nine months of 2018 for affected employees.
Because of this move, the company expects to decrease its liabilities by roughly $140 million and a pre-tax curtailment charge of $5 million. Arconic also expects to save about $50 million in pre-tax pension-related expenses in 2018 compared to the year before.
Arconic, which split from Alcoa Inc. in 2016, reported $3.3 billion in U.S. pension plan assets as of Dec. 31, 2016, according to its most recent Form 5500 filings.
An Arconic spokeswoman declined to comment beyond the release.