Colorado’s United Launch Alliance is the latest company to decide to freeze its defined-benefit pension plan starting in 2016, offering contributions to retirement savings accounts in its place.
The Centennial-based launch company is a joint venture of Lockheed Martin Corp. and The Boeing Co., both of which froze their own pensions in the last year.
ULA, which confirmed the move Wednesday, will also transition its 3,400 employees from a policy that offered separate vacation, sick and personal leave to a single pot of paid time off starting in July.
The company isn’t terminating the pension plan, which would involve divvying up a lump sum of payments owed to participants or selling off the plans to an annuity company. The accrued benefits will continue to grow with interest after the transition. Rather, it will no longer make contributions.
As an alternative to pension benefits, ULA will offer a defined-contribution account, contributing a set amount each year depending upon employees’ age and years of service. This is in addition to a 401(k) plan, Collins confirmed.
Source: Denver Business Journal